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Recent data from the Central Energy Fund (CEF) points to petrol and diesel price relief on the cards for November 2023, with lower oil prices currently being the bigger boon for energy users.
The CEF’s data points to a drop in petrol prices of around R1.90 per litre, while diesel is lining up for a cut of up to 75 cents per litre. If these over-recoveries carry through to the end of the month, motorists and other fuel users could see the first cuts in three to four months.
These are the expected changes:
Petrol 93: decrease of 189 cents per litre
Petrol 95: decrease of 193 cents per litre
Diesel 0.05%: decrease of 75 cents per litre
Diesel 0.005%: decrease of 69 cents per litre
Illuminating paraffin: decrease of 72 cents per litre
Daily snapshot data for LP Gas is not presented by the CEF.
The Department of Mineral Resources and Energy (DMRE) has noted that its daily snapshots are not predictive and do not encompass other possible modifications, such as slate levy adjustments or retail margin changes. The department determines these adjustments, considering various factors, at the end of the month.
Domestic fuel costs are primarily governed by the rand/dollar exchange rate and international oil prices. The fuel price is adjusted on the first Wednesday of every month based on these two factors.
For November, lower oil prices have been working in the favour of lower prices, while a generally weaker rand is still pushing an under-recovery.
Rand
The rand has maintained a generally weaker position in October, ranging from just under R19.00 to the dollar, to well above R19.50.
While starting the month on the front foot, the local unit crashed in the first week of the month, only to balance out with a solid recovery by the end of last week.
The rand weakened on risk aversion linked to the Israel-Hamas war, before gaining sharply on lower U.S. Treasury yields. Stronger-than-expected US payroll data saw the rand weaken to R19.64/$ during the course of the week, but the unit managed to find its feet by Friday, closing at R19.01/$.
This past week, the rand started off slightly stronger, moving below R19.00 to trade at R18.92 in early trade – but the risk factors that are keeping it under pressure still longer.
Economists have expressed concern that ongoing tensions in the Middle East, mixed with the same local factors that have kept the rand on the back foot for much of the year, will keep the unit range-bound at the current weaker levels.
Oil
A significant drop in oil prices have been the main contributor to the lower price forecast for fuel – although the Israel-Hamas war has increased risk factors.
Oil prices pushed higher than $95 a barrel in recent weeks, but managed to pull back to $85 a barrel over the period under review by the CEF.
It is uncertain how long the good times will last, however, with oil prices again shooting up to over $90 a barrel.
The new risks associated with oil prices are tied to Iran – a major oil producer – potentially being pulled into the Israel-Hamas conflict. Should this happen, and should more nations be drawn in, economists have warned that oil prices will definitely be affected, and this will filter through to energy prices.
|
Inland |
October Official |
November Expected |
|
93 Petrol |
R25.22 |
R23.33 |
|
95 Petrol |
R25.68 |
R23.75 |
|
Diesel 0.05% |
R25.02 |
R24.27 |
|
Diesel 0.005% |
R25.22 |
R24.53 |
|
Illuminating Paraffin |
R18.92 |
R18.20 |
|
Coastal |
October Official |
November Expected |
|
93 Petrol |
R24.50 |
R22.61 |
|
95 Petrol |
R24.96 |
R23.03 |
|
Diesel 0.05% |
R24.29 |
R23.54 |
