South African motorists could be facing another painful fuel price increase in October, with the latest data pointing to petrol prices moving closer to R29 a litre and diesel potentially climbing above R32 a litre if current international oil prices and the rand-dollar exchange rate remain under pressure.
The warning comes just days after motorists were hit with a steep fuel price increase in September, with petrol rising by R1.29 a litre and diesel increasing by almost R3 a litre. The latest projections are therefore likely to be unwelcome news for households already having to carefully manage their monthly budgets.
According to the latest Central Energy Fund (CEF) data, petrol 93 is showing an under-recovery of about R1.88 a litre, while petrol 95 is showing an under-recovery of around R2.01 a litre. If these figures were to remain unchanged until the end of the pricing period, inland petrol prices could rise to approximately R28.64 a litre for 93 petrol and close to R28.93 a litre for 95 petrol.
That would put 95 petrol within touching distance of R29 a litre and could push fuel prices to another record level for South African motorists.
Diesel is also showing significant pressure. Current CEF figures indicate an under-recovery of about R1.66 a litre for 0.05% sulphur diesel and around R1.98 a litre for 0.005% sulphur diesel. If the current trends continue, diesel prices could move above R30 a litre, with the higher-grade diesel potentially approaching or passing R32 a litre.
The figures are particularly concerning for households and businesses that depend heavily on vehicles. For an ordinary motorist filling a 50-litre tank, every R1 increase in the fuel price adds another R50 to the cost of filling up. A R2 increase would mean paying an additional R100 for the same amount of fuel.
For someone who drives to work every day, takes children to school or regularly travels long distances, those additional costs can quickly add up over the course of a month. Money that could have gone towards groceries, electricity, school expenses, debt repayments or savings may instead have to be used to keep a vehicle on the road.
The impact of higher fuel prices also extends well beyond motorists. Diesel is widely used by trucks, buses, agricultural machinery, construction equipment and other commercial vehicles, meaning an increase in diesel prices can raise the cost of transporting goods across the country.
This can eventually affect the prices consumers see in shops. Food, household goods and other products often travel significant distances before reaching consumers, while businesses also have to account for fuel when providing deliveries and other services.
The latest fuel price pressure is being driven largely by international oil prices and the rand-dollar exchange rate. South Africa imports crude oil and petroleum products at international prices, leaving local fuel prices exposed to movements in the global oil market and changes in the value of the rand.
International oil prices have come under renewed pressure, with Brent crude trading around the $100-a-barrel mark this week amid concerns about global supply disruptions and ongoing geopolitical tensions.
At the same time, the rand has faced pressure against the US dollar. A weaker rand makes imported oil and petroleum products more expensive in local currency, adding to the pressure already being created by higher international oil prices.
For South African consumers, the combination is particularly difficult. When international oil prices rise while the rand weakens, there is less room for the local fuel price to absorb the increase.
However, motorists should keep in mind that the October fuel prices have not yet been finalised. The figures currently being reported are projections based on the latest CEF data and can still change before the official adjustment is announced.
The final October petrol and diesel prices will depend on how international petroleum prices and the rand-dollar exchange rate perform during the remainder of the pricing period. A sustained fall in oil prices or a stronger rand could reduce the size of the expected increase, while further pressure on either factor could make the final adjustment even higher.
For now, however, the direction is raising concern. After a sharp increase in September, South African motorists could be heading towards another expensive month at the pumps, with petrol potentially nearing R29 a litre and diesel moving beyond R30 a litre.
For households already feeling the pressure of the cost of living, another fuel price increase would not simply mean paying more to fill up the car. It could also mean higher transport costs and further pressure on household budgets as businesses pass some of their increased operating and delivery costs on to consumers.
The October fuel price announcement will therefore be closely watched by motorists, commuters, businesses and households across the country, particularly those already having to make difficult choices about where their money goes each month.
