Petrol prices to increase next week

The latest unaudited data from the Central Energy Fund (CEF) shows South Africans can expect to pay more for petrol and diesel next week.

Petrol and diesel prices in South Africa are mainly affected by the strength of the rand and the global oil price.

Simply put, the cost of South Africa to buy oil, priced in US Dollars, dictates how much people will pay at the pump.

The CEF tracks global oil prices and the rand-dollar exchange to calculate the anticipated price of diesel and petrol for the coming month.

The Automobile Association (AA) said the movement in international product prices increased sharply mid-month but slowed towards the end of the month.

The slowdown at the month’s end cushioned what would otherwise be an even wider under-recovery.

The average rand to US Dollar exchange also added an impactful but smaller margin to the expected increases.

The AA said Petrol Unleaded 93 and Petrol Unleaded 95 are expected to climb by 14 cents a litre and 25 cents a litre, respectively.

Diesel is expected to increase by around 22 cents a litre and illuminating paraffin is expected to be 21 cents a litre more expensive in November.

The expected fuel price increases, which will kick in on Wednesday, are summarised below.

• Petrol 93 – Increase by 14 cents per litre
• Petrol 95 – Increase by 25 cents per litre
• Diesel 0.05% (wholesale) – Increase by 21 cents per litre
• Diesel 0.005% (wholesale) – Increase by 20 cents per litre
• Illuminating paraffin – Increase by 21 cents per litre

“We urge consumers to monitor their fuel usage carefully and budget according to the new fuel prices that come into effect next Wednesday, 6 November,” the AA said.

It added that motorists can optimise fuel consumption by keeping their cars in good mechanical condition, carefully planning routes, and avoiding heavy traffic.

The good news is that these increases are expected to be a temporary blip on an otherwise steady downward trend.

Oil demand from the world’s two largest consumers, the US and China, is expected to be subdued in the coming months.

The Chinese economy, in particular, has come under pressure, with recent stimulus unlikely to ensure it meets its GDP growth forecast of 5% for the year.

As the world’s largest importer of fuel, the slowdown of the Chinese economy is set to put immense downward pressure on oil prices.

Declining demand for oil is set to be coupled with increasing supply as the Organisation for Petroleum Exporting Countries (OPEC) unwinds supply caps.