Fuel price likely to increase again in October

Following September’s brutal petrol and diesel price hikes, the last thing South Africans need right now is yet another increase.

Unfortunately early-month unaudited data from the Central Energy Fund (CEF) shows that fuel prices across the board are likely once again. Although it’s too early in the month to accurately predict October’s fuel price adjustments, if the current oil price and currency scenario persists until the end of this month, motorists will likely face a petrol price increase of 80 cents or more, and diesel could go up by R1.50 or more.

While the latest CEF daily snapshot shows an average under recovery of R1.28 for 95 Unleaded petrol, the latest daily data is just 73 cents per litre in the red, showing an improved outlook that could see the aforementioned average decrease to around 80 cents by month-end.

Either way, that is far from good news as even an 80 cent hike – which seems like the best case scenario for now – would see a litre of 95 Unleaded rise to R24.62 at the coast and R25.34 in Gauteng.

The predicted diesel price hikes are even more worrying, given the increases of between R2.76 and R2.84 that were implemented at the beginning of this month. This could have an impact on broader inflation further down the line due to transportation costs. As with last month, the oil price equation is currently being affected by a combination of strong international oil prices and a weak rand.

Last week Brent Crude oil held above $90 per barrel for the first time in 10 months, following output cuts from Saudi Arabia and Russia, Reuters reported.

The South African rand meanwhile, which averaged R18.67 in August, was trading weaker at R18.89 at the time of writing, on September 12.

However much could change between now and month-end, when the official fuel prices will be determined, so watch this space later in the month for further updates. But prepare for the worst.