The latest data published by the Central Energy Fund shows that South African motorists can expect generally flat petrol prices in September, despite recent pressure.
Daily analysis of prices show that as of 14 August, fuel prices are expected to remain largely the same for 93 petrol and both 0.05% and 0.005% sulphur diesel, as South Africa’s currency weakness negates positive movements in global fuel prices.
Only 95 petrol is currently showing any movement in price, with the CEF pointing to a two cents increase as at the middle of the month.
Illuminating paraffin, meanwhile, should decrease by six cents per litre.
Looking at daily movements in the price as tracked by the CEF, it’s clear that the rand’s crash on Monday has had the biggest negative impact on prices so far.
The local unit was a victim in a market-wide crash among emerging economies, following the US pushing sanctions on Turkey, causing its currency to crash further after a steady decline in 2018.
The rand lost as much as 10% of its value against the US dollar, before panic in the market abated, and the affected currencies staged mild recoveries.
The CEF’s data shows that the rand/dollar exchange rate went from contributing to an over-recovery (thus petrol price reduction) of about one to two cents per litre on Monday (before crash data was factored in), to contributing to an under recovery (thus a petrol price increase) of about the same amount.
Changes in international product prices has contributed to a slight over-recovery in the price, of around a cent per litre.
With the rand still not fully recovered from the crash, should things remain at current levels, motorists can expect a flat petrol price in September.
Oil prices meanwhile, were also under pressure on Wednesday, weighed down by a dim global economic outlook. Brent crude is currently trading at $72 a barrel.
South Africa has experienced five consecutive months of petrol price hikes, with economists and analysts warning that pressure on oil-producing markets to hike the prices of crude could ultimately push prices higher by month-end.
The Department of Energy was expected to make an appearance before an Energy Portfolio Committee meeting on the petrol price on Tuesday, but failed to show up.
Government has come under pressure by opposition parties and civil action groups to intervene in rising fuel prices, but Tuesday’s no-show has been interpreted as the responsible department having no plan of action on the matter.
Here’s how the prices could look at the pumps in September.
|Fuel||August official||September expected|
|0.05% Diesel (wholesale)||R14.41||R14.41|