DIESEL SET FOR STEEP CUT NEXT WEEK
…but petrol may climb despite oil price plunge
JOHANNESBURG - As oil prices plunge to their lowest levels since 2021, diesel prices look set to ease from record highs next week. But petrol may still see a hike.
According to the latest information from the Central Energy Fund, petrol prices may be hiked by 38c to 48c a litre on Wednesday. But diesel may be cut from record-high levels, and currently looks set for a decrease of between R1.29 and R1.35 a litre.
The fuel prices are usually adjusted on the first Wednesday of a month and determined by the price of oil and the rand-dollar exchange rate.
On Monday, Brent crude oil fell almost two percent to $82 per barrel. It is now down almost 11 percent over the past month, and has lost 20 percent since the end of August. Following the invasion of Ukraine earlier this year, it traded above $130.
Oil came under renewed pressure as concerns grew about the outlook for the Chinese economy. While China’s daily Covid-19 cases hit new record highs, strict lockdowns are being enforced, which will hit China's economic growth.
Bloomberg reports a sharp decline in peak-hour traffic congestion data from Chinese search engine Baidu. On Monday in Beijing, traffic was down 45 percent from a year ago, while in Guangzhou it was 35 percent lower. Crowds are protesting the Chinese lockdowns, raising fears of a crackdown.
Over the weekend, the US government has also granted energy giant Chevron a licence to restart oil production in Venezuela as it eased three-year-old sanctions against the county. This will add to oil supplies.
Meanwhile, European Union members are still in negotiations about a new price ceiling that will be imposed on Russian oil shipments in retaliation for its invasion of Ukraine.