Diesel in SA set for steep cut next weekAs oil prices plunge to their lowest levels since 2021, diesel prices in South Africa look set to ease from record highs next week. But petrol may still see a hike.
According to the latest information from the Central Energy Fund, petrol prices may be hiked by 38c to 48c a litre on Wednesday. But diesel may be cut from record-high levels, and currently looks set for a decrease of between R1.29 and R1.35 a litre.
The fuel prices are usually adjusted on the first Wednesday of a month and determined by the price of oil and the rand-dollar exchange rate.
On Monday, Brent crude oil fell almost 2% to US$82 per barrel. It is now down almost 11% over the past month, and has lost 20% since the end of August. Following the invasion of Ukraine earlier this year, it traded above US$130.
Oil came under renewed pressure as concerns grew about the outlook for the Chinese economy. While China’s daily Covid-19 cases hit new record highs, strict lockdowns are being enforced, which will hit China's economic growth.
Bloomberg reports a sharp decline in peak-hour traffic congestion data from Chinese search engine Baidu. On Monday in Beijing, traffic was down 45% from a year ago, while in Guangzhou it was 35% lower. Crowds are protesting the Chinese lockdowns, raising fears of a crackdown.
Over the weekend, the US government has also granted energy giant Chevron a licence to restart oil production in Venezuela as it eased three-year-old sanctions against the county. This will add to oil supplies.
Meanwhile, European Union members are still in negotiations about a new price ceiling that will be imposed on Russian oil shipments in retaliation for its invasion of Ukraine.
G7 countries plan to introduce the cap on 5 December. Companies will be banned from handling Russian oil cargo – unless it's sold for less than the price ceiling. The cap is expected to be set around US$60 a barrel.
A recent rally in the rand – which surged from R17.85/$ earlier in the month to below R17 last week – will help fuel prices.
Following another hike at the start of this month, the Gauteng diesel price is now at R25.49 a litre – a new record high. A year ago, Gauteng's diesel price was around R17.20 per litre.
In Gauteng, 95 petrol costs R22.87 a litre, compared to R19.54 a year ago – but down from a peak of R26.74 in July.-Fin24