Petrol and diesel prices looking set to increase in January as under-recovery comes into play

Fuel price hikes across the board appear to be on the cards for January, but the adjustments are likely to be minor.

This is the picture painted by the latest daily snapshot released by the Central Energy Fund (CEF), which shows that an under-recovery has developed on all grades except 500ppm diesel.

As it stands, petrol prices look set to rise by between five cents (95 Unleaded) and 12 cents (93 Unleaded), while the same month average shows an under-recovery of two cents for 50ppm diesel and an over-recovery of one cent for 500ppm.

However, the latest daily numbers imply that the aforementioned numbers are likely to grow into larger increases between now and month-end, possibly in the region of 20 cents.

Following five consecutive decreases, in the second half of 2024, petrol increased by 25 cents in November and 17 cents in December, while diesel saw respective price hikes of 20 cents and 56 cents.

95 Unleaded petrol currently costs R20.68 at the coast and R21.47 in Gauteng, where 93 Unleaded retails at R21.15.

However, even after the projected increase petrol will still be less expensive than it was in January 2024, when it cost R21.77 at the coast.

January’s predicted price hikes are largely due to rand weakness, although international product price fluctuations during the month have also played a small role.

On Thursday, December 19, the South African rand was trading at R18.27 to the US dollar while Brent Crude oil was at $72.67. During the previous fuel price review period, these averaged R17.93 to the dollar and $72.70 per barrel.

ALSO READ: Why fuel is more expensive inland, and how prices are calculated in South Africa

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