South African motorists have been battered by months of steep petrol and diesel price increases, but November could bring much needed decreases across the board.
Last week we crossed our fingers as early data pointed to possible fuel price cuts for November, and now that is looking more likely than ever as we pass the mid-month mark.
This does of course come with a big disclaimer as the current conflict in the Middle East could send oil prices spiralling at any moment.
Yet as stands on October 17, the latest daily snapshot from the Central Energy Fund (CEF) shows that substantial fuel price decreases are looking likely for November, particularly in the case of petrol.
The unaudited CEF data points to a possible decrease of around R1.97 per litre for 95 Unleaded petrol and R1.92 for 93 ULP, and if current trends persist those numbers could grow further.
Should the above predictions come true, 95 Unleaded will decrease to around R23 at the coast and R23.70 inland, where 93 ULP could fall to R23.30. The cost of 93 Unleaded has risen by R3.16 per litre in just three months, and November’s decrease could take the sting out of that.
Unfortunately diesel is not showing as big an over-recovery at present, with CEF data pointing to a decrease in the region of 80 cents per litre for 500ppm.
Whether this will be enough to slow South Africa’s general inflation rate remains to be seen, however, as diesel has risen by around R5.40 in just three months.
The wholesale price of 50ppm diesel is currently pegged at R24.51 at the coast and R25.22 inland, to which you’ll need to add around R2 to arrive at the retail price, depending on the outlet.
Where are oil prices heading?
South Africa’s fuel costs are largely determined by international oil prices during the preceding month, and October has so far seen considerable volatility.
The early part of the month saw Brent Crude Oil prices dropping by about 11% on recession fears and another partial lifting of Russia’s fuel export ban, Reuters reported.
However, the devastating conflict between Israel and Hamas sent prices rising by around 5% the following week, thankfully still leaving the fuel price equation in a state of over-recovery.
Oil was trading at $89.65 at the time of writing on October 17, however any escalation in the Middle East tensions, or fears of a wider conflict, could send prices spiralling again.
That said, there should be enough equity in November’s fuel price equation, thus far, to ensure a decrease of some sorts in November, even if it is lower than expected.
The local currency, which also has a bearing on pricing, has gained some ground during October, currently trading at $18.78 to the US dollar. The local currency averaged $18.98 in September.
As it stands on October 17, petrol price cuts in the region of R2 are looking likely for November, while diesel could fall by up to R1 if current trends persist.
