Oil prices have dropped globally in the last quarter of the year, with South Africa’s petrol price expected to drop by R.23.29 (Ksh.19) to Ksh.188 a litre.
The drop is due to the commodity’s oversupply due to rising Russian flows, and concerns that supply is outpacing demand.
Brent traded near $73 with Russia’s seaborne crude exports reaching their highest level since early July.
Crude has declined by 25% since September, with OPEC+’s output cuts failing due to skepticism, Chinese consumption growth slowing, and US recession potential.
In South Africa, the prices are largely determined through the International oil costs and the rant exchange rate. These two factors play the leading roles in petrol prices.
South Africa’s price drop in fuel is attributable to an increase in production, strong local currency, and fears over strong global economic growth.
Illuminating paraffin price will also go down by R1.71 (Ksh.13.81).
LP Gas is to cost R1.67 (Ksh.13.41) a litre less. This is the second consecutive fuel price decrease.
While a decrease in petrol prices is a welcomed relief for motorists, fuel prices have still increased significantly since the start of the year, with petrol prices increasing by 8.6%.
Diesel, meanwhile, has increased by 2.6%, although this was recorded at closer to 20% just two months ago.
The petrol retail price is regulated by government (SAPIA – South African Petroleum Industry Association) and is adjusted every first Wednesday of the month.