SA motorists are a little over a week away from some much-needed relief at the petrol pumps with data suggesting a significant decrease. Photo: Gallo Images/Misha Jordaan
Petrol price watch: Weak rand, higher oil spells BAD news for cut in September
The numbers had indicated that SA motorists were to see a significant petrol and diesel price cut in early September. BUT …
SA motorists are a little over a week away from some much-needed relief at the petrol pumps with data suggesting a significant decrease. Photo: Gallo Images/Misha Jordaan
Mid-month data from the Central Energy Fund had indicated that South African motorists were to enjoy a significant petrol and diesel price cut in early September.
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However, that relief has been tempered in recent days by a weakening of the rand and higher oil prices.
The data had shown that the petrol price could see a decrease by as much as R2.60 per litre next month, while diesel will drop by slightly less at R2.30 per litre.
The mid-month snapshot was as follows:
- Petrol 95: decrease of 260 cents per litre;
- Petrol 93: decrease of 244 cents per litre;
- Diesel 0.05%: decrease of 230 cents per litre;
- Diesel 0.005%: decrease of 225 cents per litre;
- Illuminating Paraffin: decrease of 193 cents per litre.
However, in the last week since the release of those numbers, the rand has depreciated significantly against the dollar.
As recently as last Sunday it stood at R16.17/$, but at the time of publishing exactly seven days later, that rate is now R17.02/$.
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Two factors impact petrol price change
Local petrol price fluctuations are impacted by TWO main factors
Those are the international price of petroleum products, driven mainly by oil prices, and the rand/dollar exchange rate used in purchases of these products.
Oil prices
Brent crude was trading around $93.71 a barrel on Thursday last week.
However, that price has subsequently risen to $96.09 and if that trend continues, it could yet mean the petrol price decrease won’t be anywhere near as much as initially predicted.
Oil prices hit a high of $117 per barrel in June, but dropped to an average of around $105 per barrel in July.
Exchange rate
For months the rand has been working against local fuel prices, with its weaker position in the market undercutting the benefits from lower global oil prices.
At the time of publishing the rand/dollar exchange rate is R17.02/$1.
The rand remains at the mercy of the broader global environment and any shift in sentiment could see the currency tumble.
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The final overall price decrease (hopefully) will be confirmed later this month with the new price coming into effect at midnight on Tuesday, 6 September.
Go easy on the accelerator until then, Mzansi!
