Brace for petrol price pain in September, experts warn

 ·22 Aug 2023

Vehicle finance group WesBank says that a weaker rand and rising oil prices are converging to deliver a blow to motorists in September.

“As September approaches, the convergence of oil prices and the rand/dollar exchange rate assumes paramount significance in shaping local fuel prices,” the group said.

“With both factors aligned against motorists, the impending month threatens to bring about heightened challenges at the fuel pumps.”

The impending petrol and diesel price hikes are reflected in the latest data from the Central Energy Fund, which shows a massive hike on the way for diesel – up to R2.70 per litre – and a significant jump for petrol of up to R1.60 per litre.

Both the weaker rand and rising oil prices are contributing to a significant under-recovery in prices as of 21 August 2023, with little to no hope that these trends will be reversed by the end of the month.

While the rand has strengthened against the dollar this week – moving back below R19 to the dollar – it remains a prisoner to global market movements which have not favoured riskier assets and emerging markets.

The oil price, meanwhile, has dropped from highs around $88 a barrel, but is not showing any signs of dropping to the levels of $75 a barrel last seen in June/July.

Oil prices remain within the range of $85 a barrel on tighter global supplies, but prices are softer.

According to Bloomberg analysis, a rally in crude that started in recent months has faltered over the last couple of weeks, with futures back to where they were at the start of the year.

“Efforts by OPEC+ linchpins Saudi Arabia and Russia to curb production have tightened the market. However, the demand outlook in China is clouded, and there are signs US interest rates will need to stay higher for longer to rein in inflation,” it said.

However, despite the softening of oil prices, it would take a significant decline to reverse the R1.30-R2.40 under-recoveries seen in local fuel prices.

How to prepare

According to WesBank, while fuel price hikes are beyond the control of motorists, drivers can take be more mindful of their fuel consumption and soften the blow of the hikes by changing their driving habits.

The group provided ten practical tips that can be applied to mitigate the impact of escalating fuel expenses. 

Drive Smoothly: Avoid aggressive driving habits such as rapid acceleration, speeding, and hard braking. Smooth driving not only improves fuel efficiency but also extends the life of brakes, and tyres and reduces long-term maintenance.

  • Safer Way of Driving: Keep a safe distance between your vehicle and the one in front of you. By looking closely at what pedestrians and other cars are doing, and anticipating what might happen next, you can keep your speed as steady as possible and use less fuel. It’s also safer to drive this way.

  • Avoid Stop-Start Driving: Maintain momentum by planning ahead and flowing with traffic to minimise unnecessary braking.

  • Slow Down: Maintain a constant speed and avoid excessive speeding. Driving at slightly lower speeds can improve fuel efficiency.

  • Reduce the Load: Remove unnecessary items from the vehicle. Less weight means less energy required for acceleration.

  • Optimise Air Conditioning: Use air conditioning sparingly at low speeds and consider rolling down windows instead, providing it is safe to do so. At higher speeds (80 km/h or higher), using air conditioning is more fuel-efficient than open windows due to reduced wind resistance.

  • Plan Trips Ahead: Utilise navigation apps to find the most efficient routes and avoid traffic, reducing fuel consumption. Listen to traffic reports and try to avoid roads with too many traffic lights and intersections, where possible.

  • Check Wheel Alignment and Maintain Tyre Pressure: Ensure proper wheel alignment to reduce friction and improve fuel efficiency. Check and maintain the correct tyre pressure to improve fuel economy and vehicle performance.

  • Regular Servicing and Maintenance: Regularly service your vehicle to ensure it operates efficiently and consumes less fuel.

  • Fuel Reward Programmes: Fuel reward programmes play a vital role in assisting cash-strapped motorists by providing much-needed relief at the pump.

Read: Here is the expected petrol price for September

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