South Africans can look forward to improved petrol and diesel prices next month based on fuel recovery data for the end of the second week of October.
This data comes from the Central Energy Fund (CEF) and shows that fuel recoveries have shifted in motorists’ favour thanks to a strong, early start last week.
For petrol prices, this involved an over-recovery of between 55 and 57 cents per litre, and for diesel, the over-recovery increased to 21 cents per litre.
Illuminating paraffin has also seen positive results for consumers, with a small under-recovery (in line for a price hike) that has since developed into a movement towards an over-recovery.
You can see next month’s projected price changes for fuels below.
- Petrol 93: decrease of 42 cents per litre
- Petrol 95: decrease of 38 cents per litre
- Diesel 0.05% (wholesale): decrease of 6 cents per litre
- Diesel 0.005% (wholesale): decrease of 4 cents per litre
- Illuminating paraffin: increase of 3 cents per litre
The lower global oil price has been a key driver for these favourable price changes.
Currently, oil barrel prices have consistently settled below $65 a barrel, following the price fluctuating between $66 and $69 in September.
Recent events, such as easing tensions in the Middle East and OPEC+ nations agreeing to raise production quotas again, have contributed to this lower price.
Rand going strong
Along with global events, the Rand’s continued and surprising strength in the face of global events has helped with the favourable fuel prices.
Last week, the Rand pushed a 12-month best at R17.12/$, which has degraded slightly to $17.30/$ starting this week.
Despite this, the Rand remains in a strong position against the dollar and has seen an overall strengthening against the currency this year, starting at R18.82/$.
Heightened global uncertainty due to the Trump trade wars, geopolitical conflicts in the Middle East and Europe, and local politics and economic blows have all raised concerns over the Rand’s stability.
Some economists note that the strength of local currency is less a result of local events than the weakness of the dollar due to these global events.
Notably, while the Rand has strengthened, the dollar’s weakening has inflated the results.
“The US dollar has weakened this year by more than the rand has strengthened against it,” said Annabel Bishop, Investec chief economist.
She further explained that on a trade-wait basis, the rand has remained unchanged since the start of the year and has also traded flat or weaker against other major currencies.
That said, South Africans will appreciate the price cuts for fuel regardless of the reasons or relative statistics of the rand’s current strength.
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