Increase in fuel prices at the end of December

Stronger international petroleum prices are likely to hit South Africans hard at the pumps at the beginning of 2024‚ the Automobile Association (AA) predicts.

Commenting on unaudited mid-month fuel price data released by the Central Energy Fund (CEF)‚ the AA said “the indicative increase in fuel prices at the end of December will be around 27 cents a litre for petrol‚ 21 cents for diesel and 28 cents for illuminating paraffin“.
The first fortnight of December showed a strong appreciation in oil prices‚ while the Rand remained volatile against the US dollar‚ it noted.
The association said Saudi Arabia has indicated that its crude oil production cuts may go beyond those proposed in November and there are also signals that non-OPEC members may voluntarily decrease production‚ which has the potential to further bolster international petroleum prices.

The AA said that the impact of production cuts was not factored into current oil prices.
“If the oil-producing countries adhere to the proposed production cuts‚ oil prices are likely to strengthen until demand and production move back into equilibrium.
“Even a stronger Rand could be overpowered by a sharp climb in the oil price‚ potentially meaning a succession of fuel price hikes which could impact the economy strongly over the next few months.”