By Lehlohonolo Lehana.
Diesel prices will see a sizeable drop this week, thanks to a strong November for the rand amid declining international oil prices.
The latest weekly forecast for fuel prices by the Central Energy Fund shows a significant drop coming for diesel on Wednesday (7 December), with prices expected to come down by as much as R1.71 a litre.
Petrol, meanwhile, will likely go up by around 24 cents, the group said.
The forecasts are not the official changes – which will be announced by the Department of Mineral Resources and Energy before Wednesday – but serves as a weekly overview of the direction fuel prices are taking.
The latest forecast reflects the market on 2 December 2022:
- Petrol 93 and 95: increase of 24 cents per litre
- Diesel 0.05%: decrease of R1.71 per litre
- Diesel 0.005%: decrease of R1.66 per litre
- Illuminating paraffin: decrease of 58 cents per litre
While the rand has struggled over the last few days due to the political uncertainty presented by the section 89 findings against president Cyril Ramaphosa and speculation that his resignation was imminent, this falls outside of the assessment window for the monthly review.
The losses to the rand in recent sessions are also still not enough to put the currency back into the R18/$ territory experienced in prior months, as such, not enough to completely reverse the diesel price drop into a hike.
The rand took a beating this week after parliament’s section 98 panel made adverse findings against president Cyril Ramaphosa over the Phala Phala farm scandal, where it was said that prima facie evidence existed that the president may have contravened the country’s laws.
Amid speculation that the president was going to resign, markets were swamped with uncertainty, causing the rand to buckle even as other emerging markets rallied from more positive sentiments coming out of the US Fed, and indications that China would ease its zero-Covid policies.