Retail fuel prices in South Africa are set to decrease from Wednesday, with petrol 93 dropping by 62 cents per litre, petrol 95 falling by 66 cents, and diesel decreasing by 137 cents per litre. This move is expected to bring relief to consumers and reduce the cost of transporting goods. The decrease in fuel prices is attributed to the strengthening of the rand against the US dollar and a decrease in the global oil price.
Fuel prices have a significant impact on inflation in South Africa, affecting not only motorists but also transport and energy costs that ripple through the value chain to consumers. The South African Reserve Bank has been working to target a consumer inflation rate of 3.0%, and the recent decrease in fuel prices is seen as a positive step towards achieving this goal. The country's inflation rate cooled in November to 3.5% from 3.6% in October.
The decrease in fuel prices is also expected to benefit poor households that rely on illuminating paraffin for cooking, with the wholesale price set to fall by 110 cents per litre. This move is part of a broader effort to address the country's inflation challenges and improve the living standards of its citizens.