At mid-March, data from the Central Energy Fund (CEF) shows that diesel prices in South Africa are in for a slight drop come the first Wednesday of April, but petrol is looking at going up once more.
These predictions are based on exchange rate data and fluctuations in international petroleum product pricing from the 1st to the 14th of March 2023.
As such, the anticipated changes are not the final adjustments that will take effect next month, rather, they paint a picture of how the current economic landscape has affected the price of the liquids since the previous adjustment took place.
According to the CEF’s data, the expected fuel price changes for April are as follows:
- Petrol 93 – Increase of 25 cents a litre
- Petrol 95 – Increase of 26 cents a litre
- Diesel 0.05% – Decrease of 20 cents a litre
- Diesel 0.005% – Decrease of 22 cents a litre
These changes do not account for potential alterations in margins or levies which will be considered when the official adjustments are calculated at month-end.
What affects South African fuel prices
In March, an unfavourable exchange rate between the rand and US dollar had the largest negative impact on fuel prices in the country, reports BusinessTech.
Starting the month around R18 to the dollar, the local currency depreciated to a low point of R18.74/dollar before bouncing back to R18.16/dollar on 15 March, this drop in value still being felt by the markets.
The rand is also affected severely by happenings in the US economy, which itself is seeing an upward trend in interest rates thus drawing money away from emerging economies such as South Africa, therefore painting a bleak picture for the immediate future of the rand.
This has contributed roughly 39 cents and 42 cents per litre to the expected prices of petrol and diesel in April, respectively.
Oil prices have remained relatively consistent during March and are once again sitting below $80 per barrel for the first time in weeks.
However, volatility is expected going ahead due to China’s Covid-zero policy that is looking to kickstart an economic boom, as well as continued sanctions against Russia, one of the world’s major oil producers, which could see global supply drop at a moment’s notice.
For now, the positive moves in oil cut around 14 cents and 63 cents per litre from the expected prices of petrol and diesel in April, respectively.
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