{"id":766253,"date":"2024-04-05T12:59:47","date_gmt":"2024-04-05T10:59:47","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=766253"},"modified":"2024-04-05T13:00:18","modified_gmt":"2024-04-05T11:00:18","slug":"trouble-for-petrol-prices-in-south-africa-in-may","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/energy\/766253\/trouble-for-petrol-prices-in-south-africa-in-may\/","title":{"rendered":"Trouble for petrol prices in South Africa in May"},"content":{"rendered":"\n

Following the latest hike to petrol prices in South Africa this week, the daily recoveries for fuel are once again off to a mixed start in the new month – with a worrying outlook for prices in May.<\/p>\n\n\n\n

Motorists have just been hit with a price hike this week, with the Department of Mineral Resources and Energy hiking petrol prices by around 60-65 cents per litre on Wednesday (3 April)<\/strong><\/a>. Diesel prices were flat with a marginal increase\/decrease, depending on coastal or inland pricing.<\/p>\n\n\n\n

Closing up the first week in April and looking ahead to potential price changes in May, petrol<\/strong> prices are again showing an under-recovery in prices of around 45 cents per litre<\/strong>, kicking off the month on the back foot for motorists.<\/p>\n\n\n\n

Like early April, diesel <\/strong>prices are currently showing an over-recovery of close to 50 cents per litre<\/strong>, lining up another cut in May.<\/p>\n\n\n\n

However, given the early days with a full month ahead, market conditions can still change significantly, and the final price changes may be wildly different.<\/p>\n\n\n\n

Positive signs are already emerging for recoveries thanks to the rand, which has appreciated to its strongest level since the second week of March.<\/p>\n\n\n\n

According to Nedbank analysis, the local unit has been boosted by the favourable gold price and some positive news on the logistics front. <\/p>\n\n\n\n

The Absa PMI suggests an easing of rail and port inefficiencies, albeit from a very low base, while reports indicate that a new R3.4 billion terminal has been completed at the Durban port.<\/p>\n\n\n\n

The rand is trading around R18.65\/$ on Friday (5 April), up from R18.94 at the start of the week. <\/p>\n\n\n\n

Given that the rand\/dollar exchange rate is contributing to a small under-recovery (just 2 cents per litre), a strengthening local currency would swing that into a small over-recovery if maintained at current levels.<\/p>\n\n\n\n

However, the biggest contributor to under-recoveries for petrol (and an over-recovery for diesel) is the movement in international fuel prices, driven by global oil prices.<\/p>\n\n\n\n

This particular indicator is showing more strain for motorists, with Nedbank noting that oil prices are on the rise amid further tensions in the Middle East.<\/p>\n\n\n\n

More specifically, the Brent crude oil price is trading above $90 a barrel on Friday, rising by 5.6% this week. <\/p>\n\n\n\n

“The OPEC (oil-producing countries) ministerial meeting confirmed the production cuts agreed in June 2023, and it is expected to maintain them when it is next convened on 1 June,” the bank said.<\/p>\n\n\n\n

According to Bloomberg analysis, global benchmark Brent pierced $91 a barrel, as geopolitical risks come into play in the market.<\/p>\n\n\n\n

“The focus has shifted to a dramatic repricing of geopolitical risk, after Israel increased preparations for a potential retaliation by Tehran to a strike on an Iranian diplomatic compound in Syria. That has stoked fears of a wider regional conflict.<\/p>\n\n\n\n

Some analysts have raised their short-term rally projections to around $100 a barrel, while longer-term (three-month future) pricing has forecast $95 a barrel.<\/p>\n\n\n\n

If these projections prove true, the oil price pressure on local pricing will continue beyond May and into the rest of the year.<\/p>\n\n\n\n

\n\n\n\n

Read: Big interest rate shift on the cards for South Africa<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The rand has hit its strongest position in weeks, but oil prices are on the up as tensions rise in the Middle East – throwing up red flags for petrol prices in May.<\/p>\n","protected":false},"author":10,"featured_media":714644,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9874],"tags":[],"class_list":["post-766253","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/766253","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=766253"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/766253\/revisions"}],"predecessor-version":[{"id":766269,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/766253\/revisions\/766269"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/714644"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=766253"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=766253"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=766253"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}