Fuel prices are headed for reduction in the new year

Relief may be in sight for petrol users.

Fuel prices could drop by as much as Rs 2.80 in the new year, providing a welcome boost to cash-strapped motorists, the latest data from the Central Energy Fund shows.

Fund data shows 95 unleaded petrol could be cut by Rs 1.94 in January, with 93 petrol down by Rs 1.95.

Diesel prices could see even steeper cuts of up to R2.78 per litre.

Fuel prices are generally adjusted on the first Wednesday of a month and are determined by the price of oil and the rand-dollar exchange rate.

Oil prices have been volatile: they have fallen in recent weeks in response to global fears of an economic slowdown, but have rebounded in recent days on optimism fueled by China’s easing of its policy of zero covid In the longer term, it is believed that structural underinvestment in new oil supply could lead to structurally higher prices.

A strengthening rand, which improved from R17.38 a week ago to R17.30 on Tuesday, will help fuel prices.

In Gauteng, 95 petrol costs R23.46 a litre, down from R20.29 a year ago, but down from a peak of R26.74 a liter in July.

The price of diesel in Gauteng is R23.92 a litre, after hitting an all-time high of R25.49 in October.

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