A fuel station attendant fills a car with fuel while a dog in the car looks on There is a mixed forecast for fuel prices in January. File Picture: Independent Newspapers Archives
The Automobile Association (AA) said yesterday that mid-month data from the Central Energy Fund (CEF) indicates a slight increase in the fuel price to kick off January 2025.
Eleanor Mavimbela, the AA spokesperson, said current unaudited data from the CEF showed a mix of increases and decreases in fuel prices for January.
Based on the data, ULP95 is anticipated to increase by around three cents per litre, while ULP93 is projected to increase by 11 cents per litre.
Diesel prices are expected to drop by approximately three cents per litre and illuminating paraffin is set to decrease by about 14 cents per litre.
Mavimbela attributed these expected reductions to lower international product prices observed at the end of the previous month.
“Although the rand has not been performing well against the US dollar for most of the review period, the data indicates that changes in international product prices significantly influence these forecasted reductions.”
Mavimbela said the data could still change significantly before the official prices are announced by the Department of Mineral Resources and Energy (DMRE) and come into effect on January 1, 2025.
“It is essential to note that this is mid-month data, and the price outlook could change significantly over the next two weeks before the official January adjustment is announced, especially as the data trends closely towards a different trajectory.”
Economist Dawie Roodt said that he also expected a slight increase in the petrol price in January.
“There are still two weeks to go in December, and things can change, but as it stands, the price of Brent Crude Oil is higher than it was a month ago, currently at 73 dollars a barrel, while the rand is weaker than it was a month ago. Both those factors indicate that we could see an increase in the petrol price.”
Roodt added that he did not think the increase in the petrol price would be significant.
“It will probably increase by around 20 or 30 cents; we just have to wait for the end of the month to know for sure if the petrol price will increase.”
Old Mutual Group chief economist Johann Els said that according to the mid-month data, he expected the petrol price to be unchanged in 2025.
“The data indicates that there has been a slight under-recovery of the oil price. It is around 72 dollars a barrel, which is slightly higher than November. The rand has also been quite volatile around R17 and R18 to the US Dollar. My feeling is if the oil price continues to remain around 70 to 72 dollars and the rand continues to hover around R17 to R18 to the US Dollar, then petrol prices should be unchanged in January 2025.”
Els added that this might not be a bad thing.
“It will certainly be good news for inflation. I do anticipate that inflation will increase a bit, but with the petrol price hopefully remaining unchanged, inflation might only increase to just over 3 percent. That would be great news, as we can expect the interest rate cut of 25 basis points in January to take place.”
Waldo Krugell, an economics professor at North-West University, said that both the oil price and exchange rate have been relatively stable in the first half of the month, and there is little over or under recovery at the current price.
“If those factors stay more or less the same, fuel prices might decrease very slightly.”
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