South Africans staring down R24 a litre for petrol next week
South African motorists are facing a steep petrol and diesel price hike next week, with prices expected to jump to over R24 a litre for the first time in 2023 – and the highest point since August 2022.
Month-end data from the Central Energy Fund points to a petrol price hike of R1.60 to R1.65 per litre in September, with diesel prices expected to climb even higher at R2.67 to R2.84 per litre.
While the final changes – which will be announced by the Department of Mineral Resources and Energy before they kick on Wednesday, 6 September – might be slightly different based on various factors, the massive hike is all but guaranteed.
As reported throughout the month, the main driver behind the price hikes has been the higher price of global oil as well as the weaker rand in August, which have delivered a double-blow to motorists.
The oil price is currently trading around $85 a barrel, up significantly from the $80 a barrel levels seen at the end of July.
The rand, meanwhile, is trading at R18.59 to the dollar, a much weaker position than the R17.60/$ seen earlier.
Given the looming hikes, petrol prices in South Africa are now staring down at R24 per litre price at the pumps next week, with both 93 and 95 petrol threatening to breach this level.
Petrol in South Africa was last recorded above R24 back in August 2023 – a full year ago – where prices for 93 and 95 were at R24.99 and R25.42, respectively.
Diesel prices are also showing an upward trend and face moving to the highest point seen this year.
An economic bulletin published by the South African Reserve Bank (SARB) this month looked at ways that the government could possibly intervene on fuel prices and work to bring prices down.
The bank’s economists suggested reviewing the individual components of the basic fuel price and bringing estimates up to date with latest figures.
They also suggested rethinking the retail margins, especially in terms of what retail owners can get out of the price.
A longer-term solution would be to rework the Road Accident Fund and how it contributes to the higher prices, specifically by lowering the tax and enforcing some degree of mandatory third-party insurance on vehicle owners.
Read: Proposal for petrol prices in South Africa to be changed twice a month
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