Despite the weaker Rand, petrol and diesel prices will drop on Wednesday, 5 November said the Department of Energy (DoE) last week. This is due to global prices of Brent crude oil dropping tothe lowest they have been in four years.
Petrol will come down by 45 cents a litre, and diesel by 60 cents a litre. The wholesale price of paraffin will also decrease by 53 cents a litre.
“This is the lowest level of Brent crude oil prices in nearly four years, pressured by ample supply [and], slackening demand,” said the DoE. Oil prices have decreased by 25% since June.
The determining of the petrol prices is hinged on two factors: the Brent crude oil price and the exchange rate. “The trend depends on the oil price on the market. That is your big trend, and then the exchange rate was in a narrow band the whole time,” said Marius Luyt, head of public affairs at the Automobile Association of South Africa (AASA).
“The Brent oil price was very low over time. And then if you look at the Rand – Dollar exchange rate, there was a relief for us in that it didn’t jump or spike very high, so if it goes up or higher it will push the petrol price up,” said Luyt.
Christmas present in the form of lower petrol prices
Luyt added that they are expecting petrol prices to decrease again for December, which will be a welcome gift ahead of Christmas and for those motorists that are set to travel to their annual holiday destination. However, Luyt explained that this will all depend on the exchange rate and the price of Brent crude oil.
“What we have predicted is that there would be good news for the travellers and we will sustain these lower prices [in December],” said Luyt.
History of prices
Justmoney has tables of the petrol prices expected for Wednesday, 5 November comparing the past five months. As the DoE highlighted, petrol prices have steadily been decreasing, with only a slight increase in October.
Additionally there are also diesel prices, with the expected prices for Wednesday 5 November, 2014. Diesel has also seen a decrease over the past five months, with the biggest difference expected this month of 60 cents less per litre.