Diesel set for steep cut next week, but petrol may climb despite oil price plunge | Business

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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. | News24_Business

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 2% to $82 per barrel. It is now down almost 11% over the past month, and has lost 20% 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% from a year ago, while in Guangzhou it was 35% 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.

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