Early data from the Central Energy Fund (CEF) suggests that petrol and diesel prices could see a fifth consecutive reduction in October. The latest figures from the first week of September indicate a significant over-recovery, with prices exceeding R1 per litre for both fuels.
Currently, the over-recovery rates are:
- Petrol 93: R1.31 per litre
- Petrol 95: R1.39 per litre
- Diesel 0.05% (wholesale): R1.12 per litre
- Diesel 0.005% (wholesale): R1.25 per litre
- Illuminating paraffin: R1.18 per litre
These increases are attributed to a combination of a stronger rand and a decrease in global oil prices. If these trends continue, South African motorists could see a decrease of approximately R1.60 per litre in petrol prices by the end of the month, reversing the R3.00 increase observed in the first five months of 2024.
The rand, which had weakened due to initial market panic over US economic data suggesting a potential recession, has strengthened in recent weeks, trading around R17.70 to the dollar. Investec chief economist Annabel Bishop noted that despite some volatility, the rand has appreciated significantly from earlier in the year, with expectations for continued strengthening towards R17.00/USD by 2025.
On the oil front, prices are experiencing the deepest weekly loss in nearly a year due to persistent concerns over soft demand and ample supply. OPEC+ has postponed a planned output increase by two months, contributing to a decline in global benchmark prices. Current oil prices are trading below $73 per barrel, with concerns about slowing demand from major consumers like China and India and rising supply from non-OPEC sources.
Overall, the combination of a stronger rand and lower oil prices is contributing to the expected drop in fuel prices, offering some relief to South African motorists.