South African motorists could be in for another financial squeeze next month as early indicators point to a likely petrol price increase in October.
Data from the Central Energy Fund (CEF) for the start of September shows petrol prices are in negative territory, with significant under-recoveries recorded, while diesel and illuminating paraffin are showing some relief.
Petrol Price vs Diesel: A Mixed Bag
Petrol is currently under-recovering by between 19c and 26c per litre, putting upward pressure on pump prices. Diesel, in contrast, is showing an over-recovery of about 22c per litre, suggesting a possible price cut if trends continue. Illuminating paraffin is also in line for a decrease of around 14c per litre.
The movement is largely being driven by fluctuations in international oil prices. Brent crude is trading just under $67 a barrel slightly higher than August’s average of $66. Meanwhile, the rand/dollar exchange rate is offering some support, contributing around 3c per litre to an over-recovery.
If current trends hold, these are the projected changes for October:
- Petrol 93: +19c per litre
- Petrol 95: +26c per litre
- Diesel (0.05% & 0.005% wholesale): -22c per litre
- Illuminating paraffin: -14c per litre
Oil Market Uncertainty
The outlook for oil remains volatile. Analysts at Bloomberg warn that global supply increases could drive prices lower in the coming weeks. OPEC+ is due to meet virtually on 7 September to decide on potential further supply hikes, following its move to restore 2.5 million barrels a day earlier this year.
Despite Brent crude losing about 11% of its value this year amid oversupply and weaker demand, analysts caution that the oil market “will remain on edge,” which adds to the unpredictability of October’s fuel prices.
Rand Adds to the Complexity
The rand has also been swinging in a narrow range, mostly between R17.50 and R17.70 against the dollar. While it briefly weakened following disappointing US jobs data, it recovered after the Reserve Bank reported stronger foreign reserves.
However, the local currency remains highly reactive to global movements. A stronger dollar or renewed political and economic uncertainty in South Africa could push the rand closer to R18/$ a scenario that would hit motorists hard at the pump.
Too Early for Certainty
Experts stress that these early indicators are not final. With more than three weeks to go before October’s adjustments are confirmed, shifts in global oil markets or sudden currency movements could change the picture significantly.
For now, though, the data suggests motorists should brace for higher petrol prices in October, while diesel users may enjoy a temporary reprieve.
Related: Petrol Price Drop Expected in September – Good News for Motorists
