Daily snapshot data for LP Gas is not presented by the CEF.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
For April 2024, higher oil prices have been volatile and present a mixed result for fuel prices – still contributing to an under-recovery for petrol but an over-recovery in diesel. The stronger rand, relative to February, is supporting prices.<\/p>\n\n\n\n
It should also be noted that April marks the start of the new financial year for the government, where various tax hikes kick in. While there is no hike for the general fuel levy and Road Accident Fund levy in 2024, various other minor taxes may impact the final fuel price for April.<\/p>\n\n\n\n Rand<\/strong><\/p>\n\n\n\n While hardly in a strong position, the rand has strengthened in March 2024 to at least trade below R19.00 to the US dollar, making a positive contribution to fuel price recoveries to the tune of 13 cents per litre.<\/p>\n\n\n\n The rand’s big swing came at the end of last week with market tensions easing on two fronts: the first is US interest rates, where the message for the US Federal Reserve that a cutting cycle is coming and ‘not necessarily far off’.<\/p>\n\n\n\n The US moving into a cutting cycle is likely to spur other central banks, including the South African Reserve Bank, to follow suit – however, the timing is still in question, with most analysts expecting the first cuts only in the second half of the year.<\/p>\n\n\n\n The second front is local, where anxiety over the coming 2024 elections is less pronounced. Polling – which is indicative, not predictive of the result – shows that populist (anti-business, damaging to economic growth) parties are not gaining in the country, easing some tensions.<\/p>\n\n\n\n Progress is also being made in the partnership between the government and businesses in resolving South Africa’s main crises, spinning some positive sentiments.<\/p>\n\n\n\n That said, all these factors are far from set in stone, and markets could swing out of the rand’s favour at short notice. <\/p>\n\n\n\n The rand is currently trading at R18.74 to the dollar, slightly weaker than earlier in the week, but still some ways off from the R19.00\/$ mark.<\/p>\n\n\n\n Oil<\/strong><\/p>\n\n\n\n Global oil prices have broken out of the narrow range they have been trading in for most of the year, pushing higher to over $85 a barrel.<\/p>\n\n\n\n According to Bloomberg market analysis, prices are now holding near a four-month high after the International Energy Agency forecast a supply deficit through 2024, changing its earlier projection of a surplus on the premise of oil-producing nations (OPEC+) maintaining production cuts.<\/p>\n\n\n\n The IEA assumes that OPEC and its allies will retain their curbs for the rest of the year to \u201cbalance oil markets,\u201d Bloomberg noted.<\/p>\n\n\n\n However, while prices are rising now, this will reflect only in future pricing with current recoveries reflecting the impact of the range-bound prices over the past month or so.<\/p>\n\n\n\n In addition to this, Bloomberg noted some counter-pressures to the rising oil prices, including rising non-OPEC supply, China\u2019s demand concerns and persistent US inflation that\u2019s pushing back expectations for interest rate cuts.<\/p>\n\n\n\n![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/03\/Fuel-prices-mid-March-24-v2.jpg\")
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