Huge fuel price cuts in Namibia, SA
Oil, strong rand drivers
Oil has been under pressure of late, with the average Brent oil price in South Africa falling from US$78.54 per barrel in August to US$72.82 over the past month.
Petrol and diesel prices will drop significantly in both Namibia and South Africa tomorrow.In Namibia, petrol prices and that of both diesel grades will decrease by N$1 per litre for the month of October.
In South Africa, fuel prices will be lowered by more than R1/l, pushing fuel prices to levels last seen before Russia invaded Ukraine in February 2022.
Following the decline in oil prices, the strengthening of the rand against the US dollar and a significant over-recovery in fuel prices locally, the new price of petrol at Walvis Bay will be N$20.25/l, while diesel 50ppm will sell for N$19.72/l and diesel 10ppm will cost N$19.82/l.
However, it should be noted that the net decrease in fuel prices will vary from location to location, taking into account the cost of delivery of fuel implied by the introduction of the weighted fuel transportation rates, the ministry of mines and energy said.
South Africa
In South Africa, the price of 95 unleaded petrol will be cut by R1.14 a litre, while 93 petrol will be R1.06 cheaper. The wholesale price of diesel will fall by between R1.12 and R1.14, depending on the sulphur content.
From Wednesday, 95 unleaded petrol will now cost R21.05 a litre in Gauteng and R20.26 on the coast. These are the lowest levels since February 2022.
Wholesale Gauteng diesel prices will reach R18.45 a litre on Wednesday, and will be R17.66 on the coast - also the lowest since February 2022.
South African and Namibian fuel prices are also determined by the rand exchange rate.
The rand traded at R17.68/US$ on average over the past month, compared to R18.05 in August.
The rand strength contributed to about 22c in cuts across petrol and diesel prices.
Oil
Russia's invasion of Ukraine caused supply chain disruptions and restricted imports of Russian crude oil, which pushed oil prices to multi-year highs.
But oil has been under pressure of late, with the department of mineral and petroleum resources in South Africa confirming that the average Brent oil price fell from US$78.54 per barrel in August to US$72.82 over the past month.
"The main contributing factor is the increased production from major oil-producing countries despite lower demand concerns."
While weaker fuel demand is expected from the US and China due to economic slowdowns, there has been strong output growth from oil producers that are not members of the Organisation of Petroleum Exporting Countries (which has been cutting production). - Additional reporting by Fin24