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Petrol Price Increase Of R1 Expected for November

Petrol Price Increase Of R1 Expected for November

The mid-month data from the Central Energy Fund (CEF) shows that fuel prices could see significant increases in November on the back of the global energy crisis and a consistently weaker rand.

The data shows an under-recovery in both petrol and diesel prices, pointing to a possible increase of between 95 and 98 cents per litre for petrol and over R1.40 per litre for diesel.

The mid-month changes are as follows:

  • Petrol 95: increase of 98 cents per litre;
  • Petrol 93: increase of 96 cents per litre;
  • Diesel 0.05%: increase of R1.41 per litre;
  • Diesel 0.005%: increase of R1.42 cents per litre;
  • Illuminating Paraffin: increase R1.42 per litre.

The Central Energy Fund (CEF) has stressed that these estimations are not predictive and do not cover other potential changes like slate levy adjustments or retail margin changes, which the department determines.

The Department of Energy makes its adjustments based on a review of the entire period. Furthermore, the outlook can change significantly before the end of October.

Petrol prices are affected by two main components – the rand/dollar exchange rate and charges to international petroleum product costs, primarily driven by oil prices.

A weaker ZAR/USD exchange rate in mid-October is contributing to an under-recovery of around 23 cents per litre for all fuel types. Differences in price and refining costs for petrol and diesel create a divergent path, with diesel seeing an over-recovery of R1.17 per litre in product price changes, while petrol shows an over-recovery of 72 to 74 cents per litre.

Exchange rate

The rand firmed on Friday and made a 3% weekly gain. The local currency shrugged off mixed domestic economic data, including August manufacturing and mining numbers, reinforcing the view that the economic recovery from the Covid-19 pandemic has been uneven across sectors.

Despite this strengthening, the rand is yet to recover the R14.50 level which it saw at the end of September, contributing to the under-recovery in fuel.

Oil prices

Brent crude saw prices as high as $85.10 a barrel on Friday (15 October), a price that would have seemed unthinkable just 18 months ago, when Covid halted global mobility and trashed demand.

“The situation is tight, and OPEC is overtightening,” said Gary Ross, a veteran oil consultant, turned hedge fund manager at Black Gold Investors.

“The broader energy problem is making things worse because you’re getting substitution on top of seasonal demand increases. This is quite an explosive situation.”

This is how the price changes are expected to reflect at the pumps:

Fuel (Inland) October official November expected
95 Petrol R18.33 R19.31
93 Petrol R18.11 R19.07
0.05% diesel (wholesale) R15.72 R17.13
0.005% diesel (wholesale) R15.75 R17.17
Illuminating Paraffin R9.80 R11.22




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