South Africans are paying less for fuel in December 2020 than they did at the start of the year.
This is according to data from the Automobile Association of South Africa (AA), which showed that both the inland and coastal prices of petrol and diesel had decreased since January.
The inland price of unleaded 93 octane petrol, for example, had declined from R15.84 to R14.26 per litre.
The difference was even greater for unleaded 95 users, with a drop from R16.16 to R14.46 per litre.
The news was also good for diesel motorists, with 50ppm going from R14.67 to R12.49 and 500ppm falling from R14.62 to R12.45.
These numbers are in stark contrast with 2019, when most fuel types increased by around R2 per litre.
The graphs below show how South Africa’s inland and coastal fuel prices changed for each month of 2020.
The elephant in the room
The main reason for the decline in prices was, of course, the impact of the COVID-19 pandemic on oil prices.
According to Statista, oil prices such as the US WTI crude oil, Europe’s brent crude oil, and OPEC’s reference basket saw massive declines.
With lockdowns in effect in multiple countries, few people were travelling and demand for fuel was low, which meant that the price of oil plunged.
The biggest decline in prices happened around March and April. Europe’s brent crude oil dropped from $68.91 on 6 January 2020 to $14.22 on 28 April.
It had recovered significantly to $48.97 by 7 December 2020, but this was still much lower than the level it had started the year on.
The graph below from Statista shows how international oil prices fluctuated from December 2019 to December 2020. Click on the image to view more detailed figures.
Find more statistics at Statista
The fuel price reached its lowest level of the year in South Africa in the middle of the country’s hard lockdown – in May 2020.
The inland prices of fuel dropped to the following:
- 93 Unleaded Petrol – R12.02
- 95 Unleaded Petrol – R12.22
- Diesel 500ppm – R11.08
- Diesel 50ppm – R11.19
South Africans will be grateful for the extra few cents per litre they will be saving when compared to the beginning of the year.
However, had the Rand performed better, these gains could potentially have been far more significant.
As the country purchases its oil in US dollar, its local pricing is directly affected by the exchange rate.
At the start of the year, the currency was trading at just R14.01 to the greenback, but as of December, it was hovering around R15.
Fortunately, the Rand’s astronomical drop to almost R18 to the dollar in August was counteracted by the sustained lower oil prices at the time.