South African motorists prepare for petrol price hikes tomorrow

November is predicted to see an increase in fuel prices following five months of consecutive cuts, but there are ways for South Africans to prepare.

FNB senior economist Koketso Mano said that, on Wednesday, 6 November, petrol prices will increase by 25 cents per litre and diesel prices by around 20 cents.

This will bring the inland 95 unleaded petrol price to R21.30, while wholesale diesel prices will remain largely under R19 rands per litre.

The official changes to the price of fuel are shown below. 

• Petrol 93 – increase of 25 cents per litre
• Petrol 95 – increase of 25 cents per litre 
• Diesel 0.05% – increase of 21 cents per litre
• Diesel 0.005% – increase of 20 cents per litre

However, Mano said that, despite this monthly increase, pump prices are at least 10% lower than where they were a year ago.

She explained that November’s monthly increase is largely driven by higher oil prices. However, the stronger rand mitigated some of these increases.

In addition, oil prices have remained quite volatile as Middle East tensions continue. Nevertheless, prices have been range-bound, failing to breach the $75 per barrel mark on a sustained basis.

“We think this is because market fundamentals remain largely in view,” she said. “What we saw recently is that OPEC decided to delay output increases, which has supported prices.”

In addition, Mano said South Africa should see Chinese authorities providing more detail on upcoming stimulus measures, which would be aimed at raising activity in the economy, which would be supportive of commodity demand.

“We think easier monetary conditions in various parts of the globe should support activity going into 2025,” she added.

“The issue is that for now, you know, weak demand remains a theme, suggesting that higher supply will only drive prices lower.”

Meanwhile, the rand dollar exchange rate has continued to strengthen and will be further supported by stimulus activity or high activity in China as it supports industrial and precious metal prices and South Africa’s terms of trade.

However, the US election is coming up, and the outcome remains a key risk to the rand’s near-term performance.

“Any volatility and adverse risk sentiment would weigh on currencies such as the rand,” Mano warned.

However, in the meantime, the rand remains around FNB’s estimate of fair value, which is R17.50 against the US dollar, which is great for South Africa’s total import bill and imported inflation.

FNB’s product head of integrated advice, Ester Ochse, said that, in preparation for the fuel price hike this month, consumers can consult their budgets to see if there’s a way to use discretionary spending for their fuel.

“And, of course, use your loyalty programs where possible to pay for your fuel so it doesn’t affect your budget too much,” she said.

“Going into the festive season, be very conscious that if you are travelling, your fuel might be costing you slightly more than what you originally budgeted for.”