South Africans can expect a sharp increase in petrol price of between 52 cents and 54 cents per litre in February, with diesel set to rise between 47 cents and 51 cents.
This is according to month-end data from the Central Energy Fund prior to the official announcement from the Department of Mineral Resources and Energy.
Projections for the fuel price in February have steadily deteriorated throughout January, going from no change at the beginning to a significant increase by the end of the month.
This is predominantly due to a rise in the price of oil due to the conflict in the Middle East and rising geopolitical tensions.
The local pricing is still reflecting the surge in oil prices seen at the end of last week when separate attacks in the Middle East – on US troops in Jordan and a hit on a fuel tanker in the Red Sea – sent prices to the highest point in months.
Oil prices shot to levels last seen when the Hamas attacks on Israel filtered through to markets worrying about escalations in November 2023.
However, at the start of the new week, tensions over the attacks have simmered slightly, reversing the spike but still leaving prices at month-long highs.
Oil is trading at $82.78 per barrel, higher than the average seen across December and the beginning of January.
Layton Beard from the Automobile Association said that the increases could have been even worse if the rand had not begun to hold its ground and reverse some of its weakness versus the dollar.
Beard also noted that a decrease in the slate levy should provide some relief, but this is not enough to compensate for the rise in global oil prices.
Investec chief economist Annabel Bishop said the rand has found support in global macroeconomics, with the US avoiding a recession in 2023 and prospects of an interest rate cut by the Fed looking more certain.
“The US GDP data staved off some concerns, strengthening the case for a soft landing for the US while also reducing some degree of market expectations on the timing of the first cut in the US,” Bishop said.
For the rand, the currency will remain beholden to US inflation, Bishop said, with no notable chance of a US cut seen before May and prospects for a local rate cut only coming after that.
She said consumers will remain under pressure for some time yet due to the rising cost of living in South Africa, driven partly by the rise in fuel prices.