Even better news about petrol prices in South Africa

South Africa’s projected fuel price under-recoveries have fallen from over R4.5 per litre to less than R2 per litre and are still on a downward trajectory, potentially leading to a small price cut next month.

According to the Central Energy Fund (CEF), petrol is now looking at an under-recovery of between R1.67 and R1.72 per litre.

Diesel, meanwhile, is on track for an under-recovery of around R1.24 per litre. While both fuels are still in the red, this is a major turnaround from the CEF’s earlier reports.

At the start of October, petrol and diesel were looking at massive hikes of R4.57 and R2.91 per litre, respectively, meaning that the under-recoveries for both fuels have more than halved over the last two weeks.

These are the CEF’s latest fuel price adjustment predictions as of 20 October:

• Petrol 93 – increase of R1.72 per litre
• Petrol 95 – increase of R1.67 per litre
• Diesel 0.05% (wholesale) – increase of R1.23 per litre
• Diesel 0.005% (wholesale) – increase of R1.24 per litre

Unfortunately, while South Africa’s fuel under-recoveries have diminished, motorists should not expect a dramatic price drop anytime soon.

Brent crude oil has risen to $110 per barrel this month as traders weigh the risk of further Iranian attacks in the Strait of Hormuz against robust crude oil flows from the Persian Gulf.

Despite renewed hostilities in the Middle East, crude exports from the region have continued at an accelerated pace, according to Bloomberg.

US Energy Secretary Chris Wright said that flows had recovered to about 80% of their prewar level, although refined-product shipments remained constrained.

In South Africa, the high oil price has resulted in a higher contribution to the Basic Fuel Price (BFP) of 129c per litre.

Adding to this is a weaker rand/US dollar exchange rate, which is currently pegged at R16.46 per USD, resulting in a higher contribution to the BFP of 37c per litre.

The following table shows how fuel prices will be affected in November, based on the current projections:

Petrol 93 price 2 October – 19 October

Petrol 95 price 2 October – 19 October

Diesel 0.05% price 2 October – 19 October

Diesel 0.005% price 2 October – 19 October