South African drivers may soon face a significant spike in fuel costs, as data from the Central Energy Fund (CEF) suggests major under-recoveries in petrol, diesel, and illuminating paraffin prices. According to the latest figures, there is an under-recovery of R3.29 per litre for 95-grade petrol and R3.08 for 93-grade petrol. If these under-recoveries are fully passed on to consumers, the price for 95 petrol could exceed R30 per litre in inland areas.
In addition to petrol, the forecast for October includes considerable increases for diesel and illuminating paraffin. The expected rise is R2.80 per litre for 0.05% diesel, R3.19 for 0.005% diesel, and R3.57 for illuminating paraffin. These potential increases are driven primarily by higher international oil prices and a weakening rand against the US dollar. With Brent crude oil trading around $100 per barrel, the cost of fuel in South Africa is experiencing upward pressure.
The rise in diesel prices is particularly concerning as it could have a ripple effect on various sectors, including transport, agriculture, and construction, subsequently impacting the cost of moving goods across the country. This scenario underscores the broader economic implications of fluctuating fuel prices.
While these projections indicate significant increases, they are not the final pump prices that will be implemented. The Department of Mineral and Petroleum Resources is tasked with determining the official price adjustments, and factors such as international oil price changes, exchange rates, and the fuel-price slate levy could influence the final cost to consumers.
The new fuel prices are scheduled to take effect on October 7. Until then, motorists and businesses alike will be closely monitoring updates from the Department of Mineral and Petroleum Resources to gauge the full impact on their expenses.