BUSINESS NEWS - The decrease in fuel prices for January is as welcome as the increase in December 2021 were unwelcome.
But motorists should still try to save petrol as much as possible – and avoid the temptation to buy a big, thirsty vehicle – the petrol price is likely to stay high during 2022.
General consensus is that oil prices will remain at current levels for a few months, at best, and then start to increase again.
The Automobile Association (AA) noted in commentary to the recent fuel price announcement by the Department of Mineral Resources and Energy that oil prices were slightly lower during the first few weeks of December, while the rand was slightly stronger.
“The rand has strengthened against the US dollar, pulling away from the lows of mid-December when worries mounted over the economic impact of travel bans imposed as the Omicron variant of Covid-19 swept the world,” says the AA.
“The rand has since clawed its way back to around the R15.88 mark, some forty cents stronger than its mid-December low.
“Benchmark international oil prices were mostly flat through the first three weeks of December, although they climbed back above $70 a barrel on concerns over the impact of the Omicron variant,” it adds.
The AA noted that higher infection rates in the northern hemisphere may lead to lower consumer and industrial demand for petroleum products, as was seen in the initial waves of Covid-19 in 2020 especially.
“This could lead to a depressed oil price in the short to medium term. If so, that would bring some relief to South African fuel users…
“However, this should not distract from the fact that the current fuel prices are still far in excess of what South Africans were paying just a few months ago,” it warns.
The retail price of petrol dropped by between 68 and 71 cents a litre and the wholesale price of diesel was reduced by between 67.8c and 69.8c a litre.
These reductions put the inland price of 93 octane petrol at R19.36 per litre and that of higher quality diesel at R17.28 per litre.
