South African motorists should expect another fuel price decrease in February, according to the Central Energy Fund’s (CEF) weekly forecast, which predicts a price cut of between 80 cents and R1.40 for petrol and diesel, respectively.
According to CEF’s forecast for the week ending January 6, petrol prices are anticipated to drop by 87 cents per litre while diesel could be slashed by R1.40 per litre. It also forecast that the price of paraffin is also expected to fall by R1.12 per litre.
The CEF cited a huge drop in international product prices for petroleum, guided by global oil movements, as the main influence behind the expected decrease in fuel prices.
This is also supported by the rand being stronger against the dollar. Global oil prices have dropped below $80 (R1 362) a barrel so far in January, ending last week over 8% lower.
The drop in fuel prices was largely driven by market sentiment around demand, with analysts holding a dim outlook for demand coming from industrious nations like China, while supply concerns eased.
The rand/dollar exchange rate is making a positive contribution to the local fuel price, accounting for between 13 and 16 cents per litre to the projected cut.
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