Fuel prices are set to drop significantly in February, as it did in January.
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With fuel prices already at their lowest levels in years, the latest estimates from the Central Energy Fund point to more cuts at the start of February.
A strong rand and lower international fuel prices are working in motorists’ favour.
Local fuel prices are determined in part by the cost of oil and the rand-dollar exchange rate, as oil is priced in dollar.
With two more weeks to go before prices are set for next month, 95-octane petrol is currently on track for a 82c per litre cut, with a R1.02 decrease for diesel with 0.005% sulphur.
At current estimates, paraffin is due a 81c per litre increase.
Over the past week, however, the estimated cuts have been on a declining trend, which could indicate that the final price adjustments — which will come into effect on 4 February — may not be as favourable.
Earlier this week, the Brent oil price broke through the $65-a-barrel level for the first time since November amid concerns the US would attack oil giant Iran in response to its government crackdown against protesters. The Venezuelan upheaval and disruptions to Kazakh exports in the Black Sea have also support the oil price, which has been under pressure in recent months due to a glut in the market.
On Thursday, oil suffered its biggest decline in more than six years following a report that Israel’s Prime Minister Benjamin Netanyahu asked US President Donald Trump to postpone plans for an attack on Iran.
By Friday morning, Brent was trading at $62, virtually unchanged from a week ago.
The rand has held steady below R16.50 per dollar for most of the past couple of weeks, closing at its strongest level in a year, R16.34, on 6 January and again on Thursday, 15 January. It contributes between 21c and 23c per litre to the current fuel price cuts.
With 95-octane currently selling for R20.75 per litre in Gauteng and R19.92 per litre on the coast, a drop of anything more than 75c per litre will bring the Gauteng petrol price below R20 per litre for the first time in four years, since January 2022, when it was R19.61.
