African Markets

Fuel price cuts may be on the way next week

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After a grueling year at the pump, South Africans may finally be able to relax next week. According to the Central Energy Fund, petrol and diesel prices are expected to fall by 73c to 76c per litre, depending on the grade of fuel.

Local fuel prices are determined by international oil prices, as well as the dollar-rand exchange rate, because South Africa purchases oil in dollars. Over the last month, the rand has fallen from R15.39 to R15.74.

Since January, the price of 95 petrol in Gauteng has risen by 37%, from R14.86/l to R20.29. This was primarily due to the skyrocketing price of oil. The price of oil will rise by the most in more than a decade in 2021. This was due to faster economic growth and increased fuel demand, as lockdowns were reduced globally.

“Additionally, surging natural gas prices spurred greater demand for oil-derived products while OPEC+ continues to only drip-feed additional supplies onto the market,” Bloomberg reported. Goldman Sachs forecasts further gains in oil prices in 2022. Petrol and diesel prices will be adjusted on Wednesday next week, and an announcement on price changes is expected soon.