As oil prices reach their lowest price point since 2021, diesel costs are set to decrease while petrol prices might still see a price hike.
(Photo by Mykola Tys/SOPA Images/LightRocket via Getty Images)
According to the latest information from the Central Energy Fund, petrol prices may be hiked by 38c to 48c a litre on Wednesday 30 November 2022. Although diesel might be set for a price cut of between R1.29c and R1.35c a litre.
Fuel prices are usually adjusted on the 1st Wednesday of the month and determined by the price of oil compared to the rand-dollar exchange rate.
On Monday 28 November 2022, Brent crude oil decreased by almost 2% to R1 391 a barrel. It is now down by 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 R2 207.
Oil came under renewed pressure as concerns grew about the standpoint of the Chinese economy. After an outbreak of daily Covid-19 cases hit new record highs, strict lockdowns are being enforced.
In order to try and add to oil supplies, the US government has also recently granted energy giant Chevron a licence to restart oil production in Venezuela after raising the three-year sanctions it had previously imposed on the country.
Meanwhile, the European Union members are still in negotiations about a new price ceiling that will be imposed on Russian oil shipments in retaliation for its war against Ukraine.
The cap is planned to be introduced on 5 December 2022. 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 R1 018 a barrel.
The rand recently had a surge from R17.85/$ earlier this month to below R17/$ last week, this will help fuel prices.
Following another hike at the start of the month, the Gauteng diesel price is now at R25.49 a litre which is a new record high. A year ago, Gauteng’s diesel price was around R17.20 per litre.
Petrol costs R22.87 a litre for unleaded 95, compared to R19.54 a year ago – which is still a reasonable drop from the peak of R26.74 which it reached in July.
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