Motoring

Five in a row? Massive fuel price cut predicted for October

The fuel price forecast for October points to more relief at the pumps for South African motorists, with current data suggesting that substantial decreases for both petrol and diesel could become a reality if trends persist until the end of this month.

The predicted cuts can be attributed to the lower international prices of Brent crude oil and a stronger rand.

Following the September drop, motorists have been forking out R21.79 for a litre of 93 unleaded petrol and R22.19 per litre for 95 unleaded.

The price of diesel (0.05% sulphur) was reduced by 79c/litre and R1.05/litre for 0.05% sulphur and 0.005% sulphur respectively.

October fuel prices: Expected changes in petrol, diesel and paraffin

According to the latest data from the Central Energy Fund (CEF), petrol prices are slated for an October decrease of more than R1/ litre, while diesel prices are edging towards a decrease of around R1.10/ litre.

Petrol 93: Decrease of R1.19 cents per litre.
Petrol 95: Decrease of R1.28 cents per litre.
Diesel 0.05% (wholesale): Decrease of R1.10 per litre.
Diesel 0.005% (wholesale): Decrease of R1.11 per litre.
Illuminating paraffin: Decrease of R1.04 cents per litre.

If the current over-recoveries hold, it would bring petrol prices to below R21/ litre – its lowest level since way back in early 2022.

This is after petrol prices spiked by R3 per litre in consecutive hikes between January and May 2024.

Fuel price drivers: Rand/dollar and global oil prices

Petrol and diesel price changes are implemented on the first Wednesday of every month and are determined by two factors:

The rand/US dollar exchange rate, which determines how fuel is purchased.
Global oil prices, which determine how much fuel costs to purchase.

The official fuel price adjustments will come into effect on Wednesday, 2 October.

The main driver for the current recovery is the lower international oil prices, boosted by a stronger overall rand compared to a month ago.

“The rand has been strong and stable, but more importantly, the price of Brent Crude has dropped from $80 a barrel a month ago and currently sits at about $72 a week, which is still good,” Old Mutual Group chief economist Johann Els was quoted as saying by IOL

At the time of writing on 16 September, the rand stood at R17.66 against the American dollar.

ALSO READ: Fuel price cuts no cause for celebration for poor consumers in SA

Potential changes

The CEF is a state-owned energy company reporting directly to the Department of Mineral and Petroleum Resources.

The latest data update however comes with the caveat that the unaudited CEF snapshots are not predictive and do not cover other potential changes to the fuel price like slate levy adjustments or retail margin changes.