According to the Central Energy Fund’s (CEF) weekly projection, fuel prices in South Africa would drop again in February, this time by between 80 cents and R1.40 for gasoline and R1.40 for diesel.
For the week ending January 6, CEF predicts a decline in gasoline prices of 87 cents per litre and a drop in diesel prices of R1.40 per litre. Additionally, it predicted that the cost of paraffin is anticipated to decrease by R1.12 per litre.
The primary factor behind the anticipated decline in gasoline costs, according to the CEF, was a significant drop in international product prices for petroleum, which was driven by global oil movements.
The rand’s strength versus the dollar also supports this. Since the beginning of January, the price of a barrel of oil has fallen below $80 (R1 362), and it ended last week nearly 8% lower.
The market’s perception of demand was a major factor in the decline in gasoline prices; experts were pessimistic about demand from economically robust countries like China, while supply fears subsided.
The local gasoline price is benefiting from the rand/dollar exchange rate, which contributes between 13 and 16 cents per litre to the anticipated decrease.
»A stronger rand could lower gasoline prices in February«