Bad news about petrol prices for December

Petrol prices are set to rise marginally in December as easing global trade tensions and the end of the United States government shutdown stoke demand for oil. 

This has pushed international oil prices higher, with a strong rand not enough to offset the impact on petrol prices for December. 

Motorists using diesel are in for substantially higher prices as this resurgent demand has put pressure on limited refinery capacity in Europe and the United States. 

South Africa’s Central Energy Fund tracks these fluctuations to forecast the impact on fuel prices in the country. Its latest data points to the following changes –

• Petrol 93 – increase of 3 cents per litre
• Petrol 95 – increase of 9 cents per litre
• Diesel 0.05% – increase of 65 cents per litre
• Diesel 0.005% – increase of 78 cents per litre

These forecasted increases will undo some of the relief motorists have experienced so far from declining fuel prices in recent months. 

This is largely due to the expectation of subdued oil demand reversing in recent weeks as the United States and China agreed to a limited trade deal. 

As this is seen as positive for global economic growth, it is expected to result in increased oil demand, with refineries potentially struggling to keep up. 

The US government also looks set to restart operations following progress on a funding deal in Congress, providing further reason for optimism around economic growth. 

This has reversed oil’s prolonged slump somewhat in 2025, with expectations for a record global surplus coming under increased scrutiny. 

The Organisation of Petroleum Exporting Countries (OPEC) have loosened its output limits on members, increasing supply at a time when global growth has generally been expected to slow. 

Increased supply with subdued demand is generally expected to be the case for the coming year, with momentary price rises driven by short-term sentiment. 

The International Energy Agency forecasts a record oil surplus in 2026, which will put immense downward pressure on prices. 

However, short-term positivity surrounding the US-China deal and the US government returning to operation may continue to push the price higher in the coming months. 

The rand has benefited from this increased positivity, with it strengthening versus the dollar at the start of November. 

This has not been enough to offset the rise in oil prices, but should there be any knock to economic confidence and oil demand, the picture may flip. 

The rand has continued to strengthen versus the dollar as commodity prices rise, boosting South Africa’s trade balance and foreign exchange earnings. 

This has been coupled with a weaker dollar on the back of expectations of the US Federal Reserve cutting interest rates. 

There has also been increased scrutiny of the United States’ financial health, with investors looking elsewhere for safety amid increased volatility and uncertainty.