Sep 29, 2024
Big Petrol Price Cut Hitting South Africa Next Week
By eKayzone.co.za – Buy and Sell Free in South Africa Marketplace with AI Chat-GPT Integration
29 September 2024
Economists and analysts predict a significant petrol price cut for South Africans next week, with the possibility of further reductions throughout the year. According to the Central Energy Fund (CEF), petrol prices are expected to drop by R1.09 per litre, and diesel by R1.10 per litre in October. This will mark the fifth consecutive price reduction since May, bringing petrol prices to around R4.60 per litre lower than the same time last year.
The driving factors behind this decline include a stronger rand and lower global oil prices. The Bureau for Economic Research (BER) reported that the continued strength in the rand and a dip in Brent crude oil prices have positively impacted local inflation and are reflected in the declining fuel prices.
Factors Affecting Fuel Price Drops
The BER highlighted that oil prices have been dropping, with Saudi Arabia reportedly abandoning its $100/bbl target and increasing production to regain market share. Additionally, Brent crude oil traded near $72 a barrel this week, contributing to the positive outlook for fuel prices in South Africa.
While OPEC+ production cuts have kept oil prices elevated, increased supply from non-OPEC countries (such as the US) and lower demand from China have softened the price outlook. However, risks like geopolitical tensions in the Middle East and uncertainty in China’s economy could reverse this trend.
Impact of Rand Strength
The South African rand has performed well, reaching as low as R17.11 this week. Positive market sentiment surrounding the country’s Government of National Unity, coupled with the US Federal Reserve cutting rates by 50 basis points, has favoured the rand. The South African Reserve Bank followed suit with a 25 basis point rate cut, providing some relief to local households.
Although economists do not foresee the rand hitting R15 to the dollar soon, continued economic reforms and global positivity could strengthen the currency over time.
Official Announcement and Price Changes
The Department of Petroleum and Mineral Resources is expected to confirm the petrol and diesel price cuts in the coming days, with the new prices set to take effect on Wednesday, 2 October.
For more breaking news updates and trends, visit eKayzone.co.za, South Africa's AI-enhanced online marketplace where you can buy and sell for free and create engaging adverts with Chat-GPT AI.
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