Biggest-ever petrol price cut forecast in South Africa

23 Nov 2018

petroliumEconomist Mike Schussler spoke of the latest petrol data released by the Central Energy Fund, announcing that the country may experience its largest petrol cut yet – although political news could still impact the outcome.

“The price of 95 octane should fall by at least 170 cents at the beginning of December. If the current falling trend continues, SA could get an R1.80 decline,” he said.

The following is the data provided by the Central Energy Fund for the 21 November:
-     A 167 cents over-recovery in the price of 95 petrol;
-     A 164 cents over-recovery in the price of 93 petrol;
-     A 114 cents over-recovery in the price of diesel.

However, the Automobile Association warned that December’s petrol price drop could be the last one seen by South African motorists for some time.

Speaking to EWN, the association’s Layton Beard said that as we move into 2019, oil supply restrictions could take place as a result of oil production cuts by Saudi Arabia.

“So, while the picture is looking good going into December, we will always caution motorists that every savings they are realising in December, they should keep for 2019 in case the price of fuel goes up again in January and in proceeding months,” he said.

Meanwhile, the rand has rallied against top currencies.

“The rand broke through the R14.00 level and more significantly closed below that level yesterday, which means that the break was sustained,” said Andre Botha, senior currency dealer at TreasuryONE.

“The rand probably enjoyed some positive sentiment from two fronts. One front is the US dollar slipped again yesterday on the back of the market questioning the Fed’s gradual hike stance yesterday and the second front that the market is probably showing its hand with what their thoughts are what the MPC will do today.”