Here is the expected petrol price for September
Mid-month data from the Central Energy Fund (CEF) points to another sizeable petrol and diesel price cut coming in September.
The data from the CEF shows that petrol prices are slated for a cut of around 65 cents per litre, while diesel prices are on track for a cut of between 53 to 77 cents per litre.
Should market conditions persist until the end of the month, this would be the fifth month of fuel price cuts, which would put the year-to-date adjustments in positive territory for motorists.
These are the expected changes:
- Petrol 93: decrease of 62 cents per litre
- Petrol 95: decrease of 67 cents per litre
- Diesel 0.05% (wholesale): decrease of 53 cents per litre
- Diesel 0.005% (wholesale): decrease of 77 cents per litre
- Illuminating paraffin: decrease of 78 cents per litre
The CEF does not present daily snapshot data for LP Gas.
The Department of Mineral Resources and Energy (DMRE) has noted that its daily snapshots are not predictive and do not encompass other possible modifications, such as slate levy adjustments or retail margin changes.
The department determines these adjustments, considering various factors, at the end of the month.
Domestic fuel costs are primarily governed by the rand/dollar exchange rate and international oil prices. In South Africa, the fuel price is adjusted on the first Wednesday of every month based on these two factors.
For September, oil prices have been lower relative to July, while the rand has weakened slightly, undercutting the over-recovery.
Oil prices
Oil prices are again trading at under $80 a barrel, spelling good news for local fuel pricing.
The market has been volatile in recent weeks after the market scare earlier in August when worries over a possible recession in the United States came to the fore.
Tensions in the Middle East and a slowdown in the Chinese market—the biggest consumer of oil—have also been keeping pricing in check.
Pricing has steadied in recent sessions as nervousness over a potential Iranian attack on Israel outweighed downbeat China data showing a decline in crude consumption.
According to analysis by Bloomberg, crude has fallen from a recent peak in early July, weighed down by a dour outlook for consumption in China, with demand being damped by growing use of cleaner fuels.
“OPEC lowered its global demand forecast for 2024 in its monthly report issued earlier this week, while International Energy Agency data showed the market would be in surplus next quarter if the cartel went ahead with a plan to restore supply,” it said.
Brent traded near $80 a barrel after falling by 3.1% over the previous two sessions. Two weeks after Iran vowed to retaliate for the killing of a senior Hamas leader on its soil, tension is building over what form the attack might take.
In China, apparent oil demand fell 8% from a year ago in July, government data showed Thursday, exacerbating the dour outlook in Asia’s biggest economy.
Oil prices and their impact on international petroleum costs are producing a 58- to 82-cents-per-litre over-recovery in local pricing.
Rand/dollar
The rand has also had a turbulent couple of weeks in August.
The local unit followed other emerging markets amid the aforementioned market panic at the start of the month, but was rescued by now-sustained positive shift in sentiment around the Government of National Unity (GNU) and expected reforms.
According to Investec chief economist Annabel Bishop, the rand is expected to continue being volatile, given the start of the interest rate cutting cycle lying ahead.
Markets widely expect the United States Fed to start cutting rates in Septemeber (and into the new year), which would be supportive of a stronger rand. However, the local Reserve Bank is also expected to start its cutting cycle at the same time, which will keep the rand muted.
However, the outlook for the rand is very bulling, with the unit expected to continue feeding off positive sentiment in the market.
It is currently trading at R18 to the dollar—a much stronger showing than the R18.60/$ position after the market panic. However, it is still weaker relative to July, where it was under R18.00 off the back of the positive outcome of the 2024 elections and setting up of government.
The weaker rand relative to July is causing a 5 cents per litre under-recovery in local pricing.
This is how the price changes will reflect at the pumps (Diesel prices reflect wholesale, pump prices will differ):
| Inland | August Official | September Expected |
| 93 Petrol | R22.71 | R22.09 |
| 95 Petrol | R23.11 | R22.44 |
| Diesel 0.05% (wholesale) | R20.38 | R19.85 |
| Diesel 0.005% (wholesale) | R20.74 | R19.97 |
| Illuminating Paraffin | R14.80 | R14.02 |
| Coastal | August Official | September Expected |
| 93 Petrol | R21.92 | R21.30 |
| 95 Petrol | R22.32 | R21.65 |
| Diesel 0.05% (wholesale) | R19.59 | R19.06 |
| Diesel 0.005% (wholesale) | R19.98 | R19.21 |
| Illuminating Paraffin | R13.80 | R13.02 |
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