December petrol price prediction a mixed picture

The Automobile Association (AA) has released its final fuel price prediction for December by forecasting an expected upturn in the price of petrol with diesel set to decline.

Commenting on the latest unaudited data report from the Central Energy Fund, the AA said it anticipates the price of petrol to be 11 cents a litre dearer come 4 December, while diesel will drop by 23 cents and illuminating paraffin by 25 cents.

“The Rand / US dollar exchange rate has remained fairly flat throughout November, contributing around a six-cent drop per litre. However, the prices of refined petrol and diesel, which usually track each-other’s movements, but with a fair gap between their prices, have showed an altogether different picture recently,” the AA said.

It however warned that the Regulatory Accounting System that adjusts the price at the pumps, when taken into consideration, will result in different figures compared to its predictions, which could result in petrol going up by 19 cents and diesel dropping by 18 cents.

“We’re currently in another period of divergence. The variance between refined petrol and diesel prices is generally attributable to changes in refining capacity and demand, especially as the Northern Hemisphere heads into its winter and demand for heating fuels increases,” the association continued. In the absence of any unexpected political or economic shocks, we are cautiously optimistic about fuel price stability heading into 2020”.

The final price adjustment will be confirmed by the Department of Energy next week.

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