Vehicle owners in South Africa may face another tough month at the fuel pumps when prices rise on December 4, with little relief in sight despite hopes for a small drop in petrol costs.
November saw an increase in both petrol and diesel prices, bringing a halt to five consecutive months of price reductions. Unfortunately, the hope for a small price cut for 93 Unleaded petrol in December is rapidly diminishing, as a weaker rand and higher global oil prices continue to push prices upward.
Fuel Price Forecast for December: Petrol, Diesel, and Paraffin
For December, the forecast indicates a mixed outcome for South African fuel prices:
93 Unleaded petrol: Decrease of 3 cents per litre
95 Unleaded petrol: Increase of 10 cents per litre
Diesel 0.05%: Increase of 47 cents per litre
Diesel 0.005%: Increase of 47 cents per litre
Illuminating paraffin: Increase of 42 cents per litre
Despite some fluctuations, the overall price changes are expected to be modest. The price of 93 Unleaded petrol is predicted to decrease slightly by 3 cents per litre, while 95 Unleaded petrol will see a small increase of 10 cents. Diesel prices, however, are on track for a significant rise of 47 cents per litre across both grades, and paraffin prices will also go up by 42 cents per litre.
Weak Rand and Rising Oil Prices Drive Negative Trend
Fuel prices in South Africa are mainly influenced by the rand-dollar exchange rate and global oil prices. The current negative trend in fuel pricing is driven by a weaker rand and higher oil prices.
The rand has been under pressure since mid-November, dropping below R18 to the US dollar for the first time in three months after former US President Donald Trump’s election victory. The impact of Trump’s potential second term and the possibility of higher trade tariffs has unsettled emerging markets, further weakening the local currency.
Meanwhile, global oil prices have risen sharply due to ongoing instability in the Middle East and increased geopolitical tensions, particularly following Russia’s missile attacks on Ukraine. As of November 27, Brent Crude oil was trading at $73 per barrel, with the rand at R18.15 to the dollar.
Taxes and Levies Add to the Pain at the Pumps
In addition to fluctuations in the rand and oil prices, domestic fuel prices are also affected by taxes and levies, which make up approximately 31% of the total price.
The Road Accident Fund (RAF) levy currently stands at R2.18 per litre for both petrol and diesel, while the General Fuel Levy (GFL), which was last adjusted in April, adds R3.96 per litre to petrol and R3.84 per litre to diesel. These levies represent a significant source of revenue for the government, contributing R95 billion to public finances.
Official Fuel Price Announcements
The official petrol and diesel price adjustments for December will be announced on Monday, December 2, and will take effect on Wednesday, December 4.
Motorists are advised to brace for higher fuel costs, driven by a combination of weaker currency, rising oil prices, and government-imposed taxes and levies. While the price hikes may not be as severe as initially feared, the overall trend points to another tough month for South African consumers at the fuel pumps.
Related Topics:
- Does Diesel Freeze in Winter?
- Why is Diesel More Expensive in the Winter?
- Can Hydraulic Hose Be Used for Diesel Fuel?