Fuel price forecast: ‘Janu-worry’ for both petrol and diesel prices?

If the current trend in fuel price predictions persists, petrol heads and diesel users could both be getting less mileage for their buck come 2025.

The weakening of the rand against the dollar has pushed fuel recoveries into the red, pointing to petrol and diesel price hikes when fuel prices are adjusted on the first Wednesday of the month — which happens to fall on 1 January.

Although the adjustments are likely to be minor, preliminary data from the Central Energy Fund (CEF)  implies that the under-recoveries are likely to grow into larger increases between now and month-end – possibly in the region of 20 cents.

 January 2025 fuel prices: Expected changes in petrol and diesel 

• Petrol 93: Increase of 14 cents per litre
• Petrol 95: Increase of 7 cents per litre
• Diesel 0.05% (wholesale): Increase of 2 cents per litre
• Diesel 0.005% (wholesale): Increase of 5 cents per litre
• Illuminating Paraffin: Decrease of 11 cents

Rand/dollar and global oil prices wipe out over-recoveries

The two largest factors in play when it comes to determining fuel prices, are the price of unrefined oil internationally, as well as the rand/ US dollar exchange rate.

Major and constant fluctuations surrounding these factors can influence the Department of Mineral and Petroleum Resources’ final decision to raise or lower fuel prices.

Global oil price

At the time of publishing (23 December 2024), Brent crude oil price traded at $73.27 a barrel.

Rand/dollar exchange rate

The rand weakened to about R18.20 against the American greenback last week when the US Fed announced its rate cut decision.

At the time of publishing, the rand/dollar exchange rate stood at R18.30/$.

The ‘Trump effect’ on the rand

 The November increase in the cost of both petrol and diesel brought five consecutive months of price decreases to a screeching halt for Mzansi motorists with December increases adding to more pain at the pumps.

According to BusinessTech, most economists and analysts are predicting that the presidency of Donald Trump would be a net negative for the rand when the United States’ president-elect, takes office on 20 January.

Sadly, for Mzansi motorists, this could factor into where fuel prices go in 2025…

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