Fuel price set to drop again in December

Motorists could be getting an early Christmas present with a predicted petrol price decrease of 70c a litre and a 50c decrease in diesel in December.

According to the Automobile Association of South Africa (AA), a steady drop in international fuel prices has offset a marginally weaker Rand/US dollar exchange rate, and motorists look set to reap the benefits at month end.

“Petroleum prices have dropped by more than ten percent over the past 15 days and the exchange rate has weakened only slightly in the same period,” the AA said.

“This has set the stage for yet another substantial drop in fuel prices.” Based on the current data, petrol is set to drop by between 69 and 72 cents per litre, with diesel showing an expected reduction of around 49 cents per litre. A decrease of around 43 cents per litre is on the cards for users of illuminating paraffin.

“This continues the trend we predicted last month, and statements from oil-producing countries seem to support the view that a slump in oil demand could see the trend sustained over a longer period,” the Association commented.

“All indications are that motorists will have more money in their pockets at month end.”

Paul Joubert, senior economic researcher at Solidarity’s Research Institute, warned that the predicted decrease could still be affected by fluctuations in the exchange rate and international oil prices, but the odds of a price increase during December was virtually non-existent.

The department of energy would make the final fuel price announcement on 28 November.