R3 per litre petrol price hike for South Africa next week

South Africa is heading towards a R3-per-litre price hike for petrol and diesel this October, pushing both fuels past R30 per litre.

New data from the Central Energy Fund for the beginning of the fifth and final week of September shows that fuel prices are still experiencing an under-recovery.

This under-recovery has worsened over the course of September and is still on an upward trajectory, meaning the fuel price hikes may be even larger by the time the official adjustments are made.

Petrol is currently on track to increase by between R2.87 and R3.06 per litre, while diesel is going to be hiked by at least R2.69 per litre.

These are the CEF’s latest fuel price adjustment predictions at the start of the fifth week of September:

• Petrol 93 – increase of R2.87 per litre
• Petrol 95 – increase of R3.06 per litre
• Diesel 0.05% (wholesale) – increase of R2.69 per litre
• Diesel 0.005% (wholesale) – increase of R3.10 per litre

Global oil prices spiked this month as the war in the Middle East shows no signs of slowing down, with the United States and Iran refusing to compromise on their demands.

Brent Crude oil surged from $86 per barrel in late August to $108 per barrel a month later. This has led to a negative movement in the international product price of fuel.

In South Africa, the higher oil price is contributing to an under-recovery of 311c and 316c per litre in the Basic Fuel Price (BFP) of petrol 95 and diesel 0.005%, respectively.

The only positive contribution is the rand/dollar exchange rate, which is sitting at R16.42 per USD at the time of writing, leading to an over-recovery in the BFP of 4c for petrol, and 6c for diesel.

According to Bloomberg’s daily oil market report, prices rose after Iran said it wouldn’t soften its conditions to reopen the Strait of Hormuz.

US President Donald Trump, meanwhile, says the Islamic Republic has overplayed its hand and that he expects negotiations to resume this week.

The US is considering curbing diesel exports to protect consumers against domestic price hikes. Houthi militants in Yemen are targeting energy facilities in the region and attacking ships moving through the Red Sea.

All of this indicates that oil prices are unlikely to see an improvement before the month is out, and the official fuel price adjustments kick in on the first Wednesday of October next week:

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

Petrol 93 price 28 August – 25 September

Petrol 95 price 28 August – 25 September

Diesel 0.05% price 28 August – 25 September

Diesel 0.005% price 28 August – 25 September