Petrol price increases expected for South Africa in February

Following several months of relief at the pumps, fuel prices in South Africa look set to start increasing once more come February.

Mid-month data published by the Central Energy Fund (CEF), which takes into account the rand/US dollar exchange rate and international oil prices, indicates that petrol costs could rise by 11c per litre on the first Wednesday of February.

Diesel prices may not be affected as much, with the CEF predicting that this fuel type could see another reduction of 3c per litre, or an increase of the same amount, depending on the grade.

Oil prices to blame

Between 28 December 2023 and 12 January 2024, the price per barrel of Brent Crude oil trended slightly upwards from an average of around $77/barrel to $78.29/barrel.

Consequently, the international product prices of petrol and diesel rose during this period, leading to an under-recovery in local fuel prices of between 11-15c per litre for petrol, and 1-7c per litre for diesel.

On the brighter side, a slight improvement in the rand/US dollar exchange rate during the first two weeks of January softened the blow dealt by the higher oil rates.

From the 1st to the 27th of December, the currency pair traded anywhere between R18.65-18.90/dollar, dropping to a range of R18.50-18.61/dollar from 28 December to 12 January, subsequently leading to an over-recovery in fuel prices of between 3-4c per litre, depending on the type of propellant.

Taking into account these inputs, fuel prices in February 2024 are expected to be adjusted as follows:

• Petrol 93 – Increase of 11 cents a litre
• Petrol 95 – Increase of 7 cents a litre
• Diesel 0.05% – Increase of 3 cents a litre
• Diesel 0.005% – Decrease of 3 cents a litre

It must be noted that these predictions are not the official changes that will be made by the Department of Energy next month, which may be higher or lower as they also take into account any potential changes in the Slate Levy, taxes, transport costs, or wholesale and retail margins.