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Thursday / 20 June 2024
HomeNewsPetrol prices in October expected to be the highest in 15 months

Petrol prices in October expected to be the highest in 15 months

Current fuel-price data indicates that South Africa will see an increase in petrol price of around R1.20 per litre and an increase in the wholesale price of diesel by as much as R2 per litre come October, according to the Automobile Association (AA).

The AA warns that if these anticipated changes materialise, they will push prices of both petrol and diesel past the R25-per-litre mark at inland rates, levels last seen in July 2022.

“The outlook is certainly bleak, although it has improved a little since the beginning of the month,” said the AA.

“Higher fuel prices will invariably lead to higher prices at the till, which will be a blow to many who are already experiencing financial distress.”

A downward trend

On 1 September, the poor performance of the average oil price and rand/US dollar exchange rate led to an under-recovery of between R1.66 and R1.70 per litre for petrol, and between R2.77 and R2.96 per litre for diesel.

As of 15 September, however, data published by the Central Energy Fund (CEF) shows that petrol prices are expected to rise by between R1.16 and R1.23 per litre in October, while the anticipated diesel price hikes range between R1.93 and R2.02 per litre, a marked reduction in comparison to the start of the month.

“The main driver behind the potential increases are higher international oil prices which have climbed substantially since August, mainly on the back of reduced output by major oil-producing nations,” said the AA.

“The CEF’s data is showing that in the case of petrol, up to 80% of the increase can be attributed to higher oil prices while these prices are responsible for up to 86% of the expected climb to the price of diesel.”

The poorer Rand/US Dollar exchange is also contributing to the expected hikes, but its impact, at the moment, is minimal compared to that of rising oil prices.

“With two more weeks before the official adjustment for October is made, South Africans will be hoping the downward trajectory continues,” said the AA.

“Although increases are now a certainty for October, the question will be by how much fuel prices will ultimately rise.”

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