South African motorists are facing the prospect of another steep fuel price increase in October, with the latest Central Energy Fund (CEF) data showing fuel price under-recoveries deepening.
The latest projections indicate that petrol prices could increase by between R2.71 and R2.88 per litre, while diesel could rise by between R2.60 and R3.00 per litre if current market conditions persist.
The projected increases are:
- Petrol 93: R2.71 per litre
- Petrol 95: R2.88 per litre
- Diesel 0.05%: R2.60 per litre
- Diesel 0.005%: R3.00 per litre
- Illuminating paraffin: R3.15 per litre
At these levels, petrol prices are on track to approach the R30-per-litre mark, although the final October adjustment will depend on movements in international oil prices and the rand-dollar exchange rate before the review period ends.
Oil prices provide some relief
The sharp deterioration in fuel price recoveries has largely been driven by elevated international oil prices amid disruptions to global energy supplies.
However, there has been some relief in recent days, with Brent crude falling below $100 a barrel on Wednesday for the first time in several weeks. The decline followed developments involving Saudi Arabia's oil infrastructure and renewed diplomatic efforts to ease the conflict involving Iran.
Investec Chief Economist Annabel Bishop says the decline in oil prices could provide some relief to South African motorists, although a substantial fuel price increase is still expected in October.
The rand has also provided some offsetting relief, but its recent weakness against the US dollar has limited the benefit. The currency was trading at around R16.26 to the dollar in the latest data.
The international oil market remains highly sensitive to developments in the Middle East, with uncertainty over the conflict and the Strait of Hormuz continuing to influence prices. Reuters reports that oil markets have responded to both diplomatic developments and concerns about global supply.
October prices not yet final
The current figures are projections based on the CEF's daily calculations and are not the final fuel price increases.
Further movements in crude oil prices, refined petroleum products and the rand could either reduce or increase the eventual adjustment.
The October fuel price changes are expected to take effect on 7 October.