Motorists can expect a drop in the petrol price in October, if current trends persist – however, diesel drivers could see a jump in prices.
This is according to mid-month fuel price data from the Central Energy Fund, which tracks daily fuel price movements.
95 petrol is currently showing an over recovery of around 11 cents per litre, while 93 petrol is showing an over recovery of 24 cents per litre.
Diesel, meanwhile, is showing an under-recovery of around 11 cents per litre, suggesting a hike is likely.
Prices have been negatively impacted by a rise in the cost of international petroleum products – while the current strength of the rand versus the dollar provides some respite.
International product prices are typically heavily influenced by international oil prices, which have settled at around $60 a barrel.
Oil prices have been kept relatively low due to pressures from the US-China trade war, which has shown no signs of letting up, despite reports of an interim deal between the two nations.
Also keeping oil prices under pressure are talks of production cuts out of Saudi Arabia, which will only be decided in December, while there is a surge in production out the US, which analysts say will make balancing the market in 2020 a difficult task.
These moves in oil price have only had a minor impact on local petrol prices, however, as they remain largely at the same levels seen a month ago.
The rand has shrugged off local volatility and poor economic fundamentals, strengthened considerably in the first half of September.
According to Bianca Botes, treasury specialist at Peregrine Treasury Solutions, the rand seems to be ‘star struck’ by global markets as all elements move in its favour.
“The past two weeks have seen markets turn from skittish and risk averse, to an emerging market dream,” she said, adding that the currency was still far from ‘safe’, however.
The local landscape remains unchanged, with tension still brewing in the streets of the major metropolitan cities as a result of attacks on foreigners, as well as protest action against gender-based violence.
On the economic front, manufacturing remains under pressure, adding only 0.4% month-on-month in July, undershooting expectations of 1.2%, while business confidence continues to decline, reaching 89.1 points in August.
Mining production numbers for July indicated a 2.4% increase while gold production lost 13.1% year-on-year in August.
“It is clear that the rally in the rand is in no way a result of local elements. Rather, the improvement witnessed in the local unit over the past two weeks can be attributed to key global factors that are driving risk appetite – continuous monetary easing by central banks, and moves in trade tension between the US and China,” Botes said.
She also noted that while the stronger rand is certainly helping to restore some positive sentiment locally, a word of warning would be in order.
“The rally in the rand, although it can be expected to extend even to around the R14.20/$ mark should the favourable environment persist, would not be sustainable in the longer term.
“We urge those purchasers looking to acquire foreign currency not to become too greedy, as the rally will eventually run out of steam, and they might end up missing a fantastic opportunity,” she said.
Here is how the current fuel price adjustments could reflect for October:
|Fuel (Inland)||September Official||October Expected|
|0.05% Diesel (wholesale)||R14.59||R14.70|