South African motorists are set to face increased fuel prices starting January 1, 2025, marking the third consecutive monthly hike.
The Department of Mineral Resources and Energy (DMRE) made this disclosure on Monday, attributing the increase to the depreciation of the rand against the US dollar and rising international petrol prices, which have led to under-recovery in fuel costs.
The new retail and wholesale prices for fuel products will be as follows:
Inland:
• Petrol 95 ULP: R21.59 (+12 cents per litre)
• Petrol 93 ULP: R21.34 (+19 cents per litre)
• Diesel 0.05% sulphur: R19.29 (+8 cents per litre)
• Diesel 0.005% sulphur: R19.44 (+11 cents per litre)
Coastal:
• Petrol 95 ULP: R20.80
• Petrol 93 ULP: R20.55
• Diesel 0.05% sulphur: R18.50
• Diesel 0.005% sulphur: R18.68
Illuminating paraffin prices will decrease by 9.50 cents per litre.
The Central Energy Fund (CEF) also confirmed that international prices for petrol rose during the review period, while diesel and illuminating paraffin prices declined.
Contributing factors to price increase
The rand depreciated against the US dollar, averaging R18.11/USD in December, compared to R17.95/USD in November.
This weakening of the currency, coupled with delays in the Organisation of the Petroleum Exporting Countries (OPEC) unwinding its production cuts, has led to increased global oil prices, further impacting South Africa’s fuel costs.
OPEC’s role in global oil prices
OPEC+, which includes Russia, recently extended its 2 million barrels per day (bpd) supply cuts and additional voluntary cuts of 1.65 million bpd until the end of 2026. This move aims to stabilize oil prices but limits supply, leaving the global market vulnerable to external shocks.
Despite these cuts, Brent crude prices have remained relatively stable in the $70–$80 per barrel range throughout 2024, with current prices around $71 per barrel. Experts warn that continued production constraints could exert upward pressure on fuel prices, further straining households and businesses in South Africa.
Motorists are advised to prepare for the financial impact of these sustained fuel price increases as the country heads into 2025.
