South African motorists are facing another major fuel-price shock, with the latest Central Energy Fund (CEF) figures pointing to a possible increase of more than R3 per litre for petrol when October’s prices take effect.
The latest projections indicate that 95 unleaded petrol could rise by about R3.21 per litre, potentially taking the inland price from the current R26.92 to around R30.13.
If that projection is reflected in the final adjustment, 95 petrol would cross the R30-a-litre threshold for the first time.
The new prices are scheduled to come into effect on Wednesday, 7 October, although the final adjustment will only be confirmed by the Department of Mineral and Petroleum Resources (DMPR).
93 Petrol Also Nearing a Record Level
The pressure is not limited to 95 petrol.
The latest CEF figures indicate a potential increase of approximately R3.01 per litre for 93 petrol. At the current inland price of R26.76, that would place the grade at just under R30 per litre.
The projections represent a sharp deterioration from earlier estimates during September, highlighting how quickly the underlying fuel-price pressures have intensified.
However, motorists should not treat the projected figures as final pump prices. CEF updates its calculations as international petroleum prices and the rand-dollar exchange rate change, while the DMPR makes the final determination.
Diesel Could Also Reach New Highs
Diesel users are facing a similarly difficult outlook.
The latest projections indicate that 0.05% diesel could increase by around R2.80 per litre, while 0.005% diesel is showing a potential increase of approximately R3.19 per litre.
At current inland prices of R29.11 and R30.05 respectively, those increases would push diesel well above R31 and R33 per litre.
Diesel prices are particularly significant for the wider economy because the fuel is extensively used by freight operators, farmers, construction companies and other commercial businesses.
A substantial increase in diesel costs can therefore affect more than motorists, with higher transport and operating costs potentially filtering through to the prices of goods and services.
Oil Prices Are Driving the Latest Pressure
International oil prices are a major contributor to the worsening outlook.
Brent crude ended September around the $100-a-barrel mark after rising during the month. The latest market movements have continued to place pressure on South Africa’s fuel-price calculations.
Because South Africa imports petroleum products and uses international prices as a key component of its fuel-price formula, movements in global oil markets can have a direct effect on local prices.
The rand has also weakened against the US dollar, increasing the cost of importing petroleum products when measured in local currency.
The combination of higher crude prices and a weaker rand has therefore pushed the CEF’s under-recoveries higher during the September review period.
How South Africa’s Fuel Price Is Calculated
South Africa’s fuel prices are adjusted monthly, with CEF calculating daily price indicators on behalf of the DMPR.
The formula takes into account international petroleum product prices and the rand-dollar exchange rate, alongside domestic components and applicable levies.
This means the daily CEF figure is an indication of where prices could move rather than an automatic increase that will appear at filling stations.
The final adjustment can also be affected by changes to the fuel-price slate levy and other elements of the regulated pricing structure.
Inland and Coastal Prices Will Differ
Motorists will not all pay the same amount for petrol and diesel because South Africa’s regulated fuel-price system uses different pricing zones.
Inland motorists generally pay more because of the additional costs associated with transporting fuel away from coastal refining and import facilities.
If the latest projections materialise, inland 95 petrol could therefore breach R30 while coastal prices remain below that level.
Diesel prices also differ between the two regions, with the wholesale benchmarks for coastal areas generally lower than their inland equivalents.
Final October Prices Still to Be Confirmed
Despite the alarming projections, motorists will have to wait for the DMPR’s official announcement before knowing exactly how much fuel will cost from 7 October.
CEF’s figures can continue moving before the final adjustment is announced because international oil prices and currency movements are constantly changing.
The latest estimates nevertheless indicate the scale of the pressure facing South African consumers.
If the projected increase for inland 95 petrol is confirmed, motorists will encounter a significant new milestone at the pumps, while diesel users and businesses that depend heavily on fuel could face another substantial increase in operating costs.
