Huge fuel increases for Mzansi in September

Tighten your belts. Petrol prices in South Africa are expected to rise by R1.39 per litre, while diesel prices could go up by as much as R2.60 per litre. Now that is massive for the already financially stressed people in Mzansi.

These expected increases are a result of an unfavourable rand/US dollar exchange rate during the first few weeks of August as well as a rise in international oil prices, which has a direct impact on the Basic Fuel Price (BFP) at which South Africa purchases its imported fuel at.

Between 28 July and 14 August, the rand depreciated from an average of R17.80/dollar to R18.94/dollar, contributing between R1.20 and R1.23 per litre to the price structures of petrol, and between R2.41 and R2.42 per litre to diesel.

Oil

At the same time, the movement in international oil prices from $84/barrel at the end of July to around $86.40/barrel at the middle of August added another 16c per litre to petrol and 17-18c per litre to diesel.

With these factors taken into account, fuel prices are expected to increase come the first Wednesday of the new month, i.e. September and to be adjusted as follows, according to the Central Energy Fund (CEF):

Petrol 93 – Increase of R1.71 a litre

Petrol 95 – Increase of R1.71 a litre

Diesel 0.05% – Increase of R2.84 a litre

Diesel 0.005% – Increase of R2.84 a litre

Illuminating Paraffin - Increase of R2.78a litre

The CEF stresses, however, that these predictions and not the official changes that will be made by the Department of Energy next month, which could be higher or lower as they also take into account any potential changes in the Slate Levy, taxes, transport costs, or wholesale and retail margins.

So what can we expect for the remainder of the year?

That is the question! Pretty much the same, I guess. South African fuel prices are expected to continue their slow ascent upward for the remainder of 2023 due to a drop in oil production by the OPEC nations and an unstable local currency that is being flogged by domestic factors including load-shedding and social unrest as well as international inputs such as strength in the US dollar.

In July, Reuters reported that oil inventories around the world are starting to drop following a considerable output cut of 1 million barrels per day from Saudi Arabia, the global leader in oil production, thus setting the stage for higher prices to come.

Locally, the performance of the rand will be the biggest contributor to fuel price hikes, or if it does well against the Greenback, price reductions.

Whichever one looks at it, the hard-pressed consumer will have to dig deeper into their pockets to fuel up.