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Wednesday / 19 June 2024
HomeFeaturesWhat to expect from petrol prices in South Africa this Wednesday

What to expect from petrol prices in South Africa this Wednesday

Fuel prices in South Africa are looking to go up across the board this Wednesday, 2 August, dealing another blow to already cash-strapped consumers, said the Automobile Association (AA).

Unaudited fuel price data published by the Central Energy Fund (CEF) shows that petrol prices are expected to rise by a maximum of 36 cents per litre, while diesel prices could see an increase of as much as 72 cents per litre.

“The data is showing that the main driver behind the expected increases is international oil prices which escalated steadily throughout the month,” said the AA.

“Easing some of the pressure on fuel prices is the Rand which improved its value against the US Dollar throughout the month. The strengthening of the local currency against the Greenback is ensuring the expected fuel increases are not higher, but this is not doing enough to avoid the hikes.”

According to the CEF, fuel prices in South Africa this Wednesday are expected to be adjusted as follows:

  • Petrol 93 – Increase of 31 cents a litre
  • Petrol 95 – Increase of 36 cents a litre
  • Diesel 0.05% – Increase of 72 cents a litre
  • Diesel 0.005% – Increase of 72 cents a litre

It must be highlighted that these predictions and not the official changes that will be made by the Department of Energy next month, which could be a few cents higher or lower as they also take into account any potential changes in the Slate Levy, taxes, transport costs, or wholesale and retail margins.

Oil prices expected to continue rising

Reuters reports that oil inventories around the world are starting to drop as demand outpaces supply following a considerable output cut of 1 million barrels per day from Saudi Arabia, the global leader in oil production.

The cuts started in November 2022 across all OPEC+ nations in response to weak demand from China. Up until now, though, higher production runs in the US have kept oil prices in the $70-80/barrel range, peaking at $84/barrel, keeping international petroleum prices relatively stable as a result.

However, by the end of August, analysts from Energy Aspects believe that the bulk of oil reserves that were built up during the first half of the year will be depleted, with “supply tightness” being accelerated by the Saudi cuts and the Northern Hemisphere’s summer season that saw more people driving and flying than during the winter.

Therefore, banks expect oil prices to rise to around the $85-90/barrel bracket by the end of the third quarter of 2023 before stabilising again as reserves start building up once more.

For petrol and diesel, the continuing rise in oil prices will have to be counteracted by an appreciating rand/US dollar exchange rate to avoid drastic increases at the pumps for the remainder of the year.

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