Big petrol price hikes expected for November – TopAuto
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Tuesday / 28 June 2022
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Big petrol price hikes expected for November

The mid-month fuel price data released by the Central Energy Fund shows that a large increase in prices for all types of fuel is expected for November.

The fuel price data, which was reported on by BusinessTech, covers factors affecting the local fuel prices up to 14 October.

For the period under review, the data shows an under-recovery in prices for both petrol and diesel, leading to an increase of up to 98 cents for petrol and around R1.40 for diesel to be expected.

The expected fuel price adjustments for November are as follows:

  • Petrol 93 – Increase of 96 cents per litre
  • Petrol 95 – Increase of 98 cents per litre
  • Diesel 0.05% – Increase of R1.41 per litre
  • Diesel 0.005% – Increase of R1.42 per litre
  • Illuminating Paraffin – Increase of R1.42 per litre

It must be noted that these are not the official fuel price adjustments that will come into effect on the first Wednesday of November, as the final adjustments will take into account additional factors like levies and retail margin changes.

Fuel price

The South African fuel price is affected by two main components, the rand/US dollar exchange rate and international oil prices – both of which can change significantly before month-end.

At mid-October, a relatively weak rand contributed to an under-recovery of 23 cents per litre for all fuel types.

Despite a slow recovery of the local currency during the period, it has yet to reach the R14.50 per $1.00 exchange rate of September.

In addition, Brent crude oil prices are high when compared to the prices at the height of the Covid-19 pandemic.

With natural gas prices also high, oil prices are expected to increase even further as global consumption increases alongside a return to normality.

“The situation is tight, and OPEC is overtightening,” said Gary Ross, hedge fund manager at Black Gold Investors.

“The broader energy problem is making things worse because you’re getting substitution on top of seasonal demand increases. This is quite an explosive situation.”

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