It’s too early to know for sure what lies ahead for diesel and petrol prices in May, but the latest data looks BAD. Photo: File

Fuel price October UPDATE: Good news for petrol, bad news for diesel

Mid-month data from the Central Energy Fund shows that SA motorists could see another significant petrol price cut in early October.

by Garrin Lambley

16-09-2022 05:30

in News

It’s too early to know for sure what lies ahead for diesel and petrol prices in May, but the latest data looks BAD. Photo: File

Mid-month data from the Central Energy Fund shows that South African motorists could see another significant petrol price cut in early October 2022.

However, there’s bad news for diesel car owners.

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According to BusinessTech, the data shows that the petrol 95 price could drop by as much as R1.31 per litre next month.

However, diesel is showing an under-recovery thus indicating an increase of around 66 cents per litre.

Earlier this month, the petrol price dropped by R2.04 giving cash-strapped motorists some much needed relief.

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Mid-month snapshot:

Petrol 95: decrease of 131 cents per litre;
Petrol 93: decrease of 122 cents per litre;
Diesel 0.05%: increase of 59 cents per litre;
Diesel 0.005%: increase of 66 cents per litre;
Illuminating Paraffin: decrease of 1 cent per litre.

However, it must be remembered that a lot can – and not doubt will – still happen in the coming weeks to impact the mid-month figures.

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As we know, fuel price fluctuations in Mzansi are impacted by two main factors:

1. The international price of petroleum products, driven mainly by oil prices

2. The rand/dollar exchange rate used in the purchase of these products

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For the first two weeks of September, oil prices remained around $100 a barrel, contributing to a significant over-recovery (good news) in local prices.

However, a weaker rand has cut into the recovery over the same period.

Exchange rate

The rand has trended significantly weaker in the first two weeks of September, largely at the mercy of global markets.

At the time of publishing the rand/dollar exchange rate is R17.47/$.

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Oil prices

Oil prices have helped ease the pressure on international petroleum product prices.

While the lower oil price is great news for motorists, the drop hasn’t had the same impact on petrol and diesel.

While petrol prices have benefitted, global demand for diesel has tightened as the northern hemisphere starts to shift away from gas heating, increasing demand for middle distillates like diesel.

As demand for diesel increases, so too does the price.

This is a major red flag as diesel is used mainly by farmers, haulage vehicles and emergency power generators, and any diesel price hike directly impacts transportation and the costs of manufacturing goods.

At the time of publishing the brent crude oil price is $93.43 a barrel.

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The final overall price changes for both petrol and diesel will be confirmed later this month with the new price coming into effect at midnight on Tuesday, 4 October.

Go easy on the accelerator until then, Mzansi!

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