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Tuesday, July 16, 2024

Diesel set for big price drop, petrol steady

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According to the latest data from the Central Energy Fund, the Automobile Association (AA) estimates that diesel prices may be cut by 78c per litre on Wednesday, April 5th.

Meanwhile, petrol prices are expected to remain largely unchanged, with 95 unleaded petrol potentially falling by 1.5c per litre and 93 unleaded petrol potentially decreasing by 4c per litre.

Illuminating paraffin prices are set to fall by R1.39 per litre.

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Fuel prices are primarily influenced by the international oil price and the rand/dollar exchange rate, as oil is priced in US dollars.

Based on lower international product prices, the AA notes that the main driver behind the decreases is largely due to this factor.

However, the higher average rand/US dollar exchange rate is counterbalancing these gains.

The AA cautions that other factors, such as zone differential costs and adjustments to the Slate Levy, may still be made by the Department of Mineral Resources and Energy.

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These adjustments will impact fuel prices, but will only be announced next week. The association further notes that if adjustments are made, petrol prices are not likely to increase significantly, while diesel and illuminating paraffin prices are still expected to come down.

The decrease in diesel prices is particularly important as it is a major input cost in the manufacturing, mining, and agricultural sectors. A decrease in diesel prices could prevent immediate rising costs in goods and services.

The Brent oil price has fallen from above $84 a barrel to around $80, while the rand has taken a big knock this month. However, it has been steadying in recent days, receiving a boost following a larger-than-expected rate hike on Thursday.

At the start of March, petrol prices were hiked by R1.27 per litre, while diesel increased by between 30c and 32c per litre.

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In Gauteng, the price of a litre of 95 unleaded petrol increased to R22.95, while it will increase to R22.30 on the coast.

A year ago, 95-octane petrol retailed for R21.60 in Gauteng, while the Gauteng wholesale diesel price reached R21.62, up from R18.87 a year ago.

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