The Automobile Association (AA) says that based on unaudited month-end fuel price data released by the Central Energy Fund, the New Year will ring in a “substantial” drop in fuel prices across the board.
“Petrol is showing a reduction of around R1.00 a litre, with diesel down by R1.30 and illuminating paraffin dropping by R1.22,” the AA said.
The AA said should this decrease materialise, it will amount to a more than R2 decrease in the fuel price since the beginning of December.
“The main driver of these reductions has been sagging international petroleum prices, spurred on by the USA which is trending towards becoming a nett exporter of oil. Should this ever come to pass, the power of the OPEC nations to influence petroleum prices would be reduced considerably, leading to increased oil price stability.”
It went on to say that 2018 was a key indication of just how vulnerable SA is to exchange rate volatility.
“Our key message to government is to work towards stabilizing the economy and managing government debt,” it said.
“Our outlook for 2019 is that South Africa’s economic fundamentals and investor confidence which influences the rand will be the biggest factors affecting fuel prices,” the AA said.