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More Pain at the Pumps: Why South Africans Face Another Petrol Price Hike
Rand strength not enough to save drivers
South Africans hoping for a breather at the pumps will have to wait a little longer. Despite the rand showing fresh resilience against the US dollar and global oil prices hovering at relatively stable levels, fuel price data is still pointing towards more bad news in October.
The Central Energy Fund’s latest figures for the third week of September show petrol prices remain in an under-recovery. Put simply, that means motorists can expect another increase next month, even if it is a modest one.
The latest outlook
The picture is mixed across different fuel types. Petrol 93 is expected to climb by 5 cents a litre, while Petrol 95 could increase by around 13 cents. Illuminating paraffin is projected to drop by 12 cents, offering some relief for households. Diesel tells a slightly different story, with wholesale at 0.05%, set for a decrease of 8 cents a litre and 0.005% down by 6 cents.
But there is a sting in the tail. The positive momentum is being driven by the stronger rand, which is helping offset international pressures. Without that support, the hikes would be higher. Analysts warn that if the local currency weakens again, the under-recovery could deepen, pushing costs up further.
Oil prices muddy the waters
Oil markets are the wild card. Brent crude briefly spiked to around $70 a barrel this month following Ukrainian drone strikes on Russian energy infrastructure, as well as supply concerns tied to OPEC+ production decisions. Although the price has since dipped back to about $67, the short-lived surge is still factored into average pricing for the month.
Global conditions suggest volatility is here to stay. The International Energy Agency has even predicted a record supply surplus next year, which has kept oil within a tight trading range, but short-term geopolitical shocks continue to spark sudden jumps.
What this means for drivers
The good news is that diesel is still showing an over-recovery of around 7 cents a litre, though this margin has shrunk from earlier in the month when it was closer to 20 cents. If global prices keep climbing or the rand loses ground, that cushion could disappear, leaving diesel users facing increases as well.
For now, the rand is the saving grace. It has held firm even in the face of US tariffs on South African exports and weak local economic data, boosted by the US Federal Reserve’s recent rate cut that widened the gap between US and South African rates, making the country more attractive to investors.
Still, the bottom line for motorists is sobering. Petrol prices are set to climb again in October, and unless the rand stays strong, drivers should brace for further strain on their budgets.
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Source: Business Tech
Featured Image: CAR Magazine
