A happier new year — welcome relief at pump as fuel prices plummet

This January, there’s one less thing to worry about: fuel prices are set to drop on Wednesday.

The Department of Mineral Resources and Energy has confirmed a welcome reduction in the prices of petrol, diesel and paraffin, which come into effect at midnight.

The retail price of 93-unleaded petrol will decrease 62c/l, while 95-unleaded drops by 76c/l. Diesel drops by R1.26/l for 0.005% sulphur and R1.18/l for 0.05% sulphur, while illuminating paraffin is down by R1.24/l.

The department attributed the main reasons for the fuel price adjustments to a reduction in the average price of Brent Crude oil, which decreased from $82.62 to $77.35 during the period under review; the average international product prices of petrol, diesel and illuminating paraffin decreasing in line with the lower crude oil prices; an increase in the price of liquified petroleum gas (LPG) due to higher freight cost; the depreciation of the rand against the dollar, which caused higher contributions to the Basic Fuel Prices of petrol, diesel and illuminating paraffin; the Slate Levy; and an octane differential between 95 and 93 petrol grades.

Last week, the Automobile Association predicted that prices would be lowered, basing its comments on unaudited data from the Central Energy Fund, after oil prices stabilised when major shipping companies resumed passage following attacks in the Red Sea. 

In a statement, the association said although it expects fuel to be cheaper in January, it is concerned about overall high prices. 

“If the expected decreases are realised, petrol prices will still be higher than they were in January 2023, but diesel prices will be marginally cheaper than at the same time. We must see all of this in the context of consumers who are still recovering from steep fuel price hikes in September and October.”

Read more in Daily Maverick: Get pumped, South Africa! Relief on way for motorists, says AA

The AA said while 2024 was starting on a positive note for consumers, it’s still too early to determine if the trend to lower prices will continue, especially given the current geo-political developments which affect international oil prices.

“For this reason, a sustainable solution to mitigating rising fuel costs is still necessary and until that solution is found, citizens will be at the mercy of fuel price hikes. We again call on (the) government to urgently initiate a transparent review of the fuel pricing structure to seek this solution.” DM