Petrol and diesel prices may be on track for further cuts

After a sharp fall in January, gasoline and diesel prices are on track for further cuts in February, according to the latest information from the Central Energy Fund.

However, recent strong oil price gains and a weaker rand may put price cuts at risk.

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.

Based on the latest oil prices and rands, the fund’s data shows the price of 95 unleaded petrol could drop by around 14 cents in February, with 93 petrol down 7 cents.

Diesel prices could fall between 37 and 49 cents per liter, according to current estimates. This could take the Gauteng diesel price below R21 for the first time since March. Russia’s invasion of Ukraine caused oil prices to rise since February.

Gasoline has already returned to pre-invasion levels.

However, gains in oil prices and the dollar before the end of the month could still thwart the decline in fuel prices. On Tuesday, Brent rose more than 2% above $86 a barrel after stronger-than-expected Chinese economic growth data.

Also, the rand has been under pressure this week. After reaching R16.70/$ last week, it was trading around R17.20 on Tuesday.

In early January, the price of petrol (both 93 and 95 unleaded) was reduced by Rs 2.06 a litre, while diesel was reduced by Rs 2.69 to 2.81.

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