September fuel price cuts could be smaller than expected due to rising oil prices

Although South Africans can look forward to cheaper petrol next month, the cuts will be smaller than expected. File picture: David Ritchie/African News Agency (ANA)

Although South Africans can look forward to cheaper petrol next month, the cuts will be smaller than expected. File picture: David Ritchie/African News Agency (ANA)

Published Aug 25, 2022

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Johannesburg: While mid-month data pointed to a petrol price decrease, in the region of R2.50 for September, recent rand weakness and stronger oil prices are threatening to push the saving to R2 or less, and there’s far worse news for those who drive diesel vehicles.

Predicting the September fuel price is tricky, given the recent oil price volatility, which means we don’t have a stable average for the month.

Although the data for the month so far points to decreases R2.31 for 95 Unleaded petrol and R2.15 for 93 Unleaded, the numbers are dropping daily due to recent oil and currency factors. The result could mean decreases of closer to R2 per litre, or less, if trends persist between now and month-end.

The diesel average is depleting far more rapidly, shedding around 16 cents a day this week, which means that the projection of a R1.31 decrease could drop significantly between now and month-end.

The predictions are based on unaudited data from the Central Energy Fund and we’ll only know the September fuel prices when the Department of Energy announces them early next month.

Given that fuel prices are close to record highs, motorists will welcome any saving. Following the August petrol price decrease of R1.32 per litre, 95 Unleaded costs R24.77 at the coast and R25.42 in the inland regions, where 93 Unleaded costs R24.99.

“The expected decreases are good news for consumers who have been battered and bruised by these prices the past six months,” the Automobile Association said in its mid-month fuel price statement.

“While fuel is still more expensive now than it was at the beginning of the year, these forecast decreases do offer some relief,” the association added.

Indeed, fuel prices have risen substantially this year. Consider that in August 2021, South Africans were paying R17.58 for a litre of 95 Unleaded at the coast and a year earlier that price was pegged at R14.47.