Africa-Press – South-Africa. South African motorists will receive immense relief in November, with the Department of Mineral and Petroleum Resources announcing significant cuts to petrol and diesel prices.
Both grades of petrol will come down by over 50 cents per litre, and diesel prices will be reduced by around 20 cents per litre.
This is on the back of declining oil prices as supply outstrips demand and a stronger rand versus the dollar as local government bonds experience significant inflows.
The following changes were announced to fuel prices by the department, set to come into effect on Wednesday, 5 November.
Petrol 93 – decrease of 51 cents per litre
Petrol 95 – decrease of 51 cents per litre
Diesel 0.05% – decrease of 21 cents per litre
Diesel 0.005% – decrease of 19 cents per litre
This decline has been driven by steady weakening in international oil prices over the past month, despite fresh sanctions on Russia’s two largest oil companies and a wave of renewed tension between the United States and China.
A key factor behind the recent drop in oil prices is the surge in supply from members of the Organisation for Petroleum Exporting Countries (OPEC).
The group has relaxed the production limits it previously imposed in an effort to sustain higher oil prices.
This increase in output, combined with growing concerns about weaker global economic growth and slowing demand, has led to forecasts of a record oil surplus in the coming year.
As a result, Brent Crude prices are set to record their third straight monthly decline — the longest losing streak for the commodity in a year.
OPEC members are also expected to ramp up production further in December, following a meeting scheduled for 2 November.
As a result, the average Brent Crude oil price used by the department to calculate fuel prices decreased from $67.16 to $64.14 over the past month.
Meanwhile, the rand has strengthened against the US dollar over the past month, supported by firm commodity prices and easing global tensions that have boosted emerging market currencies.
Investor concern is rising over the US government’s fiscal position, with national debt now exceeding $38 trillion.
This has eroded the perception of the dollar and US assets as traditional safe-haven investments, pushing investors towards alternative assets such as gold.
The rand had been affected by renewed global uncertainty in recent weeks as the US alternated between tightening tariffs on China and easing its stance.
However, tensions appear to have eased after US President Donald Trump met with Chinese President Xi Jinping in South Korea this week.
Trump described the meeting as “amazing,” noting substantial progress on key issues between the two nations.
As a result, the rand strengthened against the dollar over the past month from R17.49/USD to R17.29/USD.
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