Good news for petrol prices in South Africa next week
Petrol prices are expected to see minor adjustments next week, with Petrol 93 swinging into an over-recovery and lining up a small cut.
Month-end data from the Central Energy Fund (CEF) shows that fuel price recoveries have turned a corner at the 11th hour, with only Petrol 95 still in the red.
The pendulum has slowly been swinging in favour of motorists since the start of the month thanks to a much stronger rand and a narrowing gap in petrol and diesel product prices.
This has led to a small over-recovery in Petrol 93 of 3 cent per litre, with over-recoveries in diesel between 8 and 11 cents per litre.
Petrol 95 is still showing a small under-recovery of 4 cents per litre.
The final adjustments for the month will be announced by the Department of Petroleum and Mineral Resources before they come into effect next Wednesday, 1 October.
- Petrol 93: decrease of 3 cents per litre
- Petrol 95: increase of 4 cents per litre
- Diesel 0.05% (wholesale): decrease of 11 cents per litre
- Diesel 0.005% (wholesale): decrease of 8 cents per litre
- Illuminating paraffin: decrease of 12 cents per litre
The overall picture for fuel prices is relatively flat, with global oil prices and the rand trading a relatively tight range for much of September.
Oil prices have stuck around $67 a barrel for most of the month, with a late upswing to around $69 a barrel this week.
Oil is heading for its biggest weekly gain in more than three months as US President Donald Trump increased pressure on buyers of Russian energy in a bid to end the war in Ukraine.
Brent was steady above $69 a barrel on Friday, and is up about 4% this week.
Trump pressed Turkish President Recep Tayyip Erdogan to stop buying oil from Russia and discussed energy security with Hungarian Prime Minister Viktor Orban, after earlier this week rebuking NATO members for buying fuel from the OPEC+ producer.
That comes as Russia’s physical supplies are pressured by Ukrainian drone strikes on energy infrastructure.
Despite the late spike in prices, it may be too late to affect recoveries for October petrol price adjustments.
Global oil prices in September have been kept in check through continued demand-side pressures from the Trump tariffs, and a supply glut from OPEC+ nations increasing output.
Given the volatility of the oil price and its contribution to international product prices, oil has been contributing to an under-recovery in pricing for fuel this month.
The rand saving the day
In contrast to the negative impact from oil, the rand has been the main driver of an over-recovery in fuel prices this month.
The local unit has been surprisingly resilient against the US dollar in September, given the uncertainties and risks present in the global market.
However, the rand’s strength has mostly been driven by a weaker dollar, rather than any inherent strength due to local factors.
That said, the currency has also shaken off poor economic data, tough trading conditions, higher producer inflation, and the Reserve Bank’s policy moves.
Despite its resilience for most of the month, the rand slipped in early trade on Friday, adding to losses late on Thursday.
The late-month weakness has shown through as the US dollar surged on better-than-forecast US economic data.
The dollar index, which measures the greenback against major peers, climbed 0.6% on Thursday after figures on S economic growth, unemployment claims, durable goods, and wholesale inventories all beat expectations.
Andre Cilliers, currency strategist at TreasuryONE, said the global market focus on Friday was on another closely watched US indicator, the Federal Reserve’s preferred inflation measure, due out later in the day.
Loading ...