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South African motorists can expect a reprieve at the pumps next week, with petrol and diesel prices set for modest adjustments. Picture: iStock
Based on month-end fuel price figures, March will bring a halt to the relentless cycle of back-to-back increases in petrol and diesel prices which have been in play this year.
The combination of a softer US dollar and lower global oil prices have improved mid-month’s dismal fuel price outlook.
Unfortunately, relief will be minimal with prices of all types of fuel – with the exception of 93 unleaded petrol – expected to only take a slight dip.
The latest data from the Central Energy Fund (CEF) shows the final over- and under-recoveries for the review period for March’s fuel prices. These figures reflect international prices in dollars and the rand-dollar exchange rate.
Take a look at the breakdown of the indicators for the end of February:
Currently, 95 unleaded petrol currently costs R21.62 at the coast and R22.45 inland, while 93 unleaded retails for R22.16.
In February, both grades of unleaded petrol saw a price increase of 82 cents per litre while diesel prices climbed between R1.01 and R1.05 per litre.
These increases followed price hikes of between 12 cents and 19 cents in January, 17 cents in December and 25 cents in November.
Fuel prices are primarily determined by the price of oil and the rand/dollar exchange rate.
The weaker dollar has been the main driver of the over-recovery in prices, with global oil prices creeping lower this week due to an unexpected build in US fuel stockpiles due to lower demand, and the expectation of a peace deal between Russia and Ukraine, which could see sanctions on Russian oil lifted.
The price of Brent Crude oil hit almost three-month lows this week, dipping below the $72 (R1 329) mark on Wednesday, 26 February.
However, oil traded at higher levels earlier in the month, peaking at $77 on February 11, limiting the relief at the pumps next month.
Investec chief economist Annabel Bishop told Business Tech that the weaker dollar wqs driving the rand’s movement, with international developments playing a more significant role than domestic challenges like South Africa’s budget delays or ongoing power outages.
Despite these local issues, Bishop noted that market sentiment has largely been unfazed by them.
As always, the department of mineral resources and energy has the final say when it announces the official prices early next week before coming into effect on Wednesday, 5 March.
The department has made a point in the past of reminding consumers that the daily CEF snapshots do not cover other potential changes like slate levy adjustments or retail margin changes, which could come into play when the fuel price is determined.
NOW READ: Fuel price explainer: How is the petrol price determined? [VIDEO]
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