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2021-09-20

Here is the expected petrol price for October

Mid-month data from the Central Energy Fund (CEF) shows that fuel prices could decline in October, bringing welcome relief for motorists.


Staff Writer | Business Tech

The data made available by the CEF to 16 September shows an over-recovery in both petrol and diesel prices, pointing to a possible drop of between 18 and 21 cents per litre for petrol and around 9 cents per litre for diesel.

However, the Automobile Association (AA) warns that rising oil prices and a weakening rand could flip this around before month-end.

Fuel price shifts as of 16 September (CEF):

  • Petrol 95decrease of 18 cents per litre;
  • Petrol 93decrease of 21 cents per litre;
  • Diesel 0.05%: decrease of 9 cents per litre;
  • Diesel 0.005%: decrease of 9 cents per litre;
  • Illuminating Paraffin: decrease of 1 cent per litre.

The Central Energy Fund (CEF) has stressed that the daily snapshots are not predictive, and do not cover other potential changes like slate levy adjustments or retail margin changes which are determined by the department.

The Department of Energy makes adjustments based on a review of the full period. Furthermore, the outlook can change significantly before month-end.

Prices are affected by two main components – the rand/dollar exchange rate and charges to international petroleum product costs, largely driven by oil prices.

At mid-September, a stronger ZAR/USD exchange rate is contributing to an over-recovery of around 22 cents per litre for all fuel types, with changes to international product prices undercutting these gains.

Differences in price and refining costs for petrol and diesel create a divergent path on pricing, with diesel seeing an under-recovery of 12 cents per litre in product price changes, while petrol shows an under-recovery of 2 to 5 cents per litre.

Exchange rate

The rand depreciated by around 1% to R14.50 against the dollar since Monday, its lowest level since the start of the month, noted Citadel Global.

The local unit has been pressured by weak domestic data and a more pessimistic economic outlook for the country, but has also largely taken direction from US markets.

“A decline in retail sales in July coupled with poor manufacturing data last week raised concerns about the extent of the impact of social unrest and tighter lockdown restrictions on South Africa’s economy in the third quarter,” it said.

“This was despite the fact that President Cyril Ramaphosa announced the relaxation of Covid-19 lockdown restrictions in South Africa to level 2, shortly after the unrest.”

At the same time, market sentiment continued to be hit by persistent fears of a slowdown in global growth due to the fast-spreading delta variant and the prospect of an early tapering of US Fed stimulus, it said.

The AA noted that while the rand/dollar exchange rate was flat for much of the first half of September, recent weakening, combined with higher international petroleum prices, could push fuel prices into negative territory by month-end.

“Until government manages domestic policy more effectively, the Rand will continue to expose South Africans to the full brunt of bullish oil prices, meaning South Africans are not getting fuel as cheaply as they could be,” it said.


Oil prices

US Oil prices drew back to around $72.60 a barrel on Thursday, having touched a two-and-a-half-month high of $73.14 a barrel earlier in the week. Brent crude is at around $75 a barrel.

Bloomberg reported that oil has gained this week due to “tighter oil market conditions, as seen in the recent steep drop in US oil inventories, but also spillover from the sharp rise in European energy prices,” said Jens Pedersen, senior analyst at Danske Bank A/S.

With the focus on high energy prices across Europe, the International Energy Agency’s executive director Fatih Birol said gas prices could remain high for weeks to come on strong demand. He also said he would be surprised to see oil above $100 a barrel, despite a strong rebound in demand this year.

“We have noted oil prices spiking above $75 a barrel in recent days, and the upward trend has been evident throughout September. Brent crude, in particular, has increased by $10 a barrel in less than a month, and the Mediterranean and Singapore prices used in South African fuel pricing are also advancing,” said the AA.

“This trend could point towards substantial future fuel price increases,” it said.


This is how the price changes are expected to reflect at the pumps:

Fuel (Inland) September official October expected
95 Petrol R18.34 R18.16
93 Petrol R18.15 R17.94
0.05% Diesel (wholesale) R15.49 R15.40
0.005% Diesel (wholesale) R15.52 R15.43
Illuminating Paraffin R9.48 R9.47

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