As the mid-month data trickles in, a huge diesel price decrease is still looking highly likely for December.
In fact, the outlook has actually improved since our initial story last week, with the latest data from the Central Energy Fund (CEF) pointing to possible diesel price cuts of between R2.08 (500ppm) and R2.14 (50ppm).
The diesel prediction is an easier one to make this month as the latest daily data is in harmony with the month average, as price fluctuations have been minimal this month.
That’s not the case for petrol, however.
Although the month-average is currently pointing to a decrease of around R1.05 for 93 Unleaded petrol, if current trends persist that number is likely to fall well below the R1 mark, as the latest daily numbers show a diminished over-recovery of around 42 cents.
At this stage of the game we’d hazard a guess of a petrol price decrease in the region of 60 cents, but in fairness it is too early to predict with certainty.
Lower diesel prices can’t come too soon, given the recent spate of steep increases in the second half of this year. Diesel currently costs R2.91 more than it did in January this year and if the favourable conditions continue, leading to a R2 decrease for December, it should help to slow the general inflation rate in early 2024.
The wholesale price for 50ppm diesel currently stands at R23.69 at the coast and R24.40 inland, but this excludes the retail margins which vary between outlets as this fuel is unregulated unlike petrol.
The retail price of 95 Unleaded petrol, following this month’s very welcome R1.78 decrease, currently stands at R23.18 at the coast and R23.90 inland, where 93 Unleaded costs R23.44.
International oil prices have softened in the past few months, with Brent Crude having weakened to about $82 from a September high close to $98, Reuters reported.
This is reportedly as a result of concerns over slow economic growth and the resulting demand for fuel, with these sentiments having outweighed supply cuts by OPEC and its allies, as well as conflict in the Middle East.
However geo-political events remain a risk going forward and could result in more oil price volatility, the International Energy Agency warned.
South African rand volatility remains a risk too, although the local currency has played in our favour this month so far, and is currently contributing around 30 cents to the petrol price over-recovery and 35 cents in the case of diesel.