Slight fuel price increase expected this month
In March, consumers will witness a slight increase in petrol prices, now at US$1.54 per litre, up from US$1.53 in February.
Conversely, diesel prices have experienced a minor decrease, dropping to US$1.55 per litre from US$1.58 in the previous month.
These adjustments in local fuel prices are closely tied to the dynamics of global oil markets, particularly the fluctuations in Brent crude oil prices and geopolitical tensions as well as blending costs.
In February 2025, the average price of Brent crude oil was approximately US$79.27 per barrel, this represents a slight decrease from January’s average of US$80.12 per barrel.
The global oil market has been influenced by various factors, including geopolitical developments, supply adjustments by major oil-producing nations and shifts in global demand.
The Organisation of the Petroleum Exporting Countries and its allies (OPEC+) has played a pivotal role in balancing the oil market. In late 2024, OPEC+ decided to postpone planned production increases due to weaker-than-expected demand and competition from non-member countries.
The production increase, initially set to commence on January 1, 2025, was rescheduled to April 1, 2025, extending over an 18-month period until October 2026.
This strategic move aimed to support oil prices amidst prevailing market conditions.
Geopolitical events have also contributed to oil price volatility.
In February 2025, the announcement of new U.S. tariffs raised concerns about global economic growth and energy demand.
Despite these apprehensions, oil prices experienced a modest uptick, with Brent crude futures rising by 0,7 percent to US$75.17 per barrel. Such geopolitical tensions often lead to uncertainty in the markets, influencing both global oil prices and local fuel costs.
The correlation between global oil prices and local fuel costs is evident. As Brent crude oil prices fluctuate, they directly affect the cost of refined petroleum products. The slight increase in petrol prices and the decrease in diesel prices in March 2025 reflect these global market movements.
Economic analyst, Namatai Maeresera, emphasises the potential repercussions of rising Brent crude prices on the local economy.
“An increase in global oil prices can lead to imported inflation,” Maeresera notes. “As local fuel prices rise, transportation and production costs escalate, which are often passed on to consumers. In the short term, this scenario can reduce consumers’ purchasing power and dampen overall economic activity.”
Looking ahead, forecasts suggest that Brent crude oil prices will average around US$74 per barrel in 2025 before declining to US$66 per barrel in 2026. These projections are based on expectations of increased global oil production and potential stabilisation in geopolitical tensions.
However, unforeseen events could disrupt these forecasts, leading to further volatility in both global oil prices and local fuel costs.
The interplay between global oil prices and local fuel costs underscores the importance of monitoring international market trends. Consumers and businesses alike should remain vigilant, as fluctuations in the oil market can have cascading effects on the broader economy, influencing everything from transportation expenses to the prices of everyday goods and services.-ebsinessweekl
