Here is the expected petrol and diesel price for October

 ·15 Sep 2022
Fuel Petrol price

Mid-month data from the Central Energy Fund shows that motorists could see another significant petrol price cut in October 2022 – but it’s bad news for diesel.

The data, which serves as a snapshot of market conditions as of 14 September 2022, shows that the petrol price could drop by as much as R1.31 per litre next month. However, diesel is showing an under-recovery – thus potential increase – of 66 cents per litre.

The mid-month snapshot is as follows:

  • Petrol 95: over-recovery/decrease of 131 cents per litre;
  • Petrol 93: over-recovery/decrease of 122 cents per litre;
  • Diesel 0.05%: under-recovery/increase of 59 cents per litre;
  • Diesel 0.005%: under-recovery/increase of 66 cents per litre;
  • Illuminating Paraffin: over-recovery/decrease of 1 cent per litre.

The Department of Energy has stressed that the daily snapshots are not predictive and do not cover other potential changes like slate levy adjustments or retail margin changes, which are determined by the department at the end of the month, taking all variables into account.

The DoE makes adjustments based on a review of the entire period. Furthermore, the outlook can change significantly before month-end.

The expected price changes are contingent on current market conditions persisting through to the end of the month. Notably, even if these changes come into effect, fuel prices are still much higher than they were in February before the impact of the Russian invasion of Ukraine was felt in global markets.

Local fuel price fluctuations are impacted by two main factors – the international price of petroleum products, driven mainly by oil prices, and the rand/dollar exchange rate used in the purchase of these products.

For the first two weeks of September, oil prices have remained $100 a barrel, contributing to a significant over-recovery in local prices. However, a weaker rand has cut into the recovery over the same period.


Exchange rate

The rand has trended significantly weaker in the first two weeks of September, largely at the mercy of global markets.

Specifically, the rand has taken its lead from the US and European markets, which are experiencing high levels of inflation, and central banks in the regions pushing interest rates higher to cope.

The US Fed recently announced higher-than-expected inflation in the states, all but cementing a 75 basis point hike in rates at the end of September. The European Cental Bank, meanwhile, also hiked rates by 75bps.

“US CPI for August came out at 8.3% YoY vs market estimates of 8.1% but still down from July’s 8.5%. What really spooked the market was the rise of 0.1% in the MoM figure, which was expected to actually fall due to the sharp drop in gasoline prices,” said TreasuryOne, in a note.

“Markets are now fully pricing in a 75 bps rate by the Fed at next week’s FOMC, with the Fed also now to be extra hawkish on monetary policy.”

These international moves – dealing with the fallout of two years of Covid-19 and the ongoing war in Ukraine – have created a risk-off environment to the detriment of emerging market economies, including South Africa.

Economists anticipate rand weakness and volatility to persist over the next few months, with a wide range projection for year-end. If market conditions persist – the most likely scenario – the rand could end the year in the R17.00 to the dollar range.


Oil prices

Oil prices have helped ease the pressure on international petroleum product prices.

However, the price has fluctuated in recent sessions, Bloomberg reports, as traders grapple with concerns about global demand and assess comments from the US on refilling strategic reserves.

The price is also sensitive to events in China, which is pursuing a zero-Covid strategy, heavily disrupting industry activity. The International Energy Agency warned this week that the country is on course for its biggest annual drop in oil demand in over three decades.

“Oil is on course for the first quarterly loss in more than two years as central banks, including the Federal Reserve, tighten monetary policy to tame inflation, hurting the outlook for energy consumption,” Bloomberg said.

“The retreat has erased all the gains seen in the wake of Russia’s invasion of Ukraine, with prices earlier this month hitting the lowest level since January.”

While the lower oil price is great news for motorists, the drop hasn’t had an equal effect on petrol and diesel. While petrol prices have benefitted, global demand for diesel has tightened as the Northern Hemisphere starts to shift away from gas heating, increasing demand for middle distillates like diesel.

As demand for diesel increases, so too does the price.

This is a major red flag as diesel is used mainly by farmers, haulage vehicles and emergency power generators, and any diesel price hike directly impacts transportation and the costs of manufacturing goods.


This is how the expected price changes could reflect at the pumps:

Inland September Official October Expected
95 Petrol R23.38 R22.07
93 Petrol R22.95 R21.73
0.05% diesel (wholesale) R23.96 R24.55
0.005% diesel (wholesale) R24.16 R24.82
Illuminating Paraffin R17.60 R17.59
Coastal September Official October Expected
95 Petrol R22.73 R21.42
93 Petrol R22.30 R21.08
0.05% diesel (wholesale) R23.31 R23.90
0.005% diesel (wholesale) R23.52 R24.18
Illuminating Paraffin R16.81 R16.80

Read: Major red flag for diesel prices in South Africa

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