Motorist might finds some Reprieve in Nov for Octane Prices

South African drivers have endured months of soaring petrol and diesel prices, but there might be a reprieve in November.

Earlier, there were hopeful signs indicating possible fuel price cuts for November. As we approach the middle of the month, these reductions seem increasingly likely, although the ongoing conflict in the Middle East remains a potential spoiler.

As of October 17, data from the Central Energy Fund (CEF) suggests significant fuel price drops, especially for petrol. The preliminary CEF figures hint at a decrease of approximately R1.97 per liter for 95 Unleaded petrol and R1.92 for 93 ULP. If current trends continue, these numbers might even increase.

If these predictions materialize, 95 Unleaded could cost around R23 at coastal areas and R23.70 inland, with 93 ULP possibly falling to R23.30. This reduction could help ease the sharp increase of R3.16 per liter observed in 93 Unleaded prices over the past three months.

However, diesel is not experiencing a similar over-recovery. CEF data indicates a decrease of about 80 cents per liter for 500ppm diesel.

Whether these reductions will have a substantial impact on South Africa’s overall inflation rate remains uncertain, considering diesel has surged by approximately R5.40 in just three months.

South Africa’s fuel prices are significantly influenced by international oil prices from the preceding month. October has witnessed notable fluctuations, with Brent Crude Oil prices initially dropping by 11% due to recession fears and a partial lifting of Russia’s fuel export ban. However, the conflict between Israel and Hamas led to a 5% price increase, leaving the fuel price equation still in a state of over-recovery.

As of October 17, oil was trading at $89.65. Any escalation in Middle East tensions or fears of a wider conflict could send prices soaring once again.

Despite the uncertainty, there seems to be enough leeway in November’s fuel price equation to ensure some reduction, albeit possibly lower than anticipated. Additionally, the local currency’s slight gain against the US dollar in October, trading at $18.78 compared to September’s average of $18.98, also plays a role in pricing.

In summary, as of October 17, petrol price cuts of around R2 seem likely for November, while diesel could potentially decrease by up to R1 if current trends persist.

Source: Motoring News