NATIONAL NEWS - With about two weeks left before petrol prices are set for October, South Africans have been warned to brace for a petrol price hike.
This is according to the latest data from the Central Energy Fund (CEF) for the second week of September.
CEF data
According to the CEF data, fuel price recoveries are in the red.
This is due to global oil prices, which have been yo-yoing between $62 and $67 a barrel since the beginning of August, resulting in under-recovery of oil.
According to data from the CEF, the numbers showed that the petrol prices are heading for an increase of between 13 and 21 cents per litre.
However, diesel is expected to drop by about nine cents per litre.
Oil prices
While still at relatively depressed levels of around $67 a barrel (from above $70 at the start of the year), oil prices have been heading higher in recent sessions as United States (US) President Donald Trump threatened sanctions against countries that continue to buy lower-cost Russian oil, according to Bloomberg.
Last month, the US instituted 50% import tariffs on Indian goods as a penalty for its continued Russian oil purchases.
Fears of a supply squeeze have also increased after Ukrainian drone attacks on Russian oil infrastructure over the past week, including a large refinery in the Leningrad region as well as the Primorsk export port.
Rand’s strength
Meanwhile, the rand has strengthened to R17.35/$ on Monday, from R17.57 at the start of September.
The local currency has benefited from a weak dollar, which has been under pressure amid expectations of sharp US interest rate cuts.
Current CEF projections indicate the following mid-month petrol prices:
- Petrol 93: Increase of 11 cents per litre
- Petrol 95: Increase of 19 cents per litre
- Diesel 0.05% (wholesale): Decrease of 9 cents per litre
- Diesel 0.005% (wholesale): Decrease of 9 cents per litre
- Illuminating paraffin: Decrease of 12 cents per litre
The main contributor to the under-recovery for petrol and over-recovery for diesel is the global oil price.
The Department of Mineral Resources and Energy will make a final determination by the end of the month.
Inflation and repo
Meanwhile, consumers will be watching the news closely today when Statistics SA releases the inflation rate for August and tomorrow when the South African Reserve Bank announces its latest repo rate decision.
Economists expect that inflation was stable at 3.5% in August, remaining just above the preferred 3% of the South African Reserve Bank.
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