Next month's official fuel price adjustments for petrol and diesel will come into effect on Wednesday, 5 February 2025. Pictures: iStock
There are signs that South Africa’s fuel prices will be going in the wrong direction in February with hefty increases expected for both petrol and diesel.
Should early predictions prove true, this would make it the second consecutive hike for the year.
Fluctuations in international oil prices and the sharp depreciation of the rand were the primary drivers behind January’s fuel price increases of 12 cents per litre for 95 Unleaded petrol and 19 cents per litre for 93 Unleaded.
The latest petrol price adjustments forced motorists to dig even deeper in their pockets to fill their tanks with the price of 93 Unleaded climbing to R21.34/ litre and 95 Unleaded to R21.59/ litre.
The prices of wholesale 50ppm and 500ppm diesel were hiked 10.5 cents and 7.5 cents respectively in January.
The Central Energy Fund’s (CEF) most recent outlook (using data from the first week of the pricing review period) is pointing towards much bigger hikes come February.
The predicted fuel prices are as follow:
Depending on the grade of petrol used and the size of the vehicle’s tank, motorists might have to cough up between R28 and R53 more to fill their tanks.
The increase in diesel prices would also have a knock-on effect in the cost of transporting food, resources, and goods.
ALSO READ: January fuel price increase bad news for over-indebted consumers
Fuel prices are usually adjusted on the first Wednesday of a month and are primarily determined by the price of oil and the rand/dollar exchange rate.
Both a weaker rand and a higher global oil price are driving the current under-recovery trajectory, which kicked off in November last year.
According to BusinessTech, the rise in global oil prices follows “economic hopes in one of the world’s largest economies, with China potentially seeing more demand”.
Chinese President Xi Jinping announced in his New Year’s Eve address that the country will implement more proactive in measures to encourage economic growth in 2025, potentially boosting oil demand.
There are also concerns about a tightening of supply from Russia and Iran due to Western sanctions, which could support crude oil prices.
The rand has weakened sharply against the American greenback as US interest rate cut expectations dimmed, leading to dollar strength.
Fewer US interest rate cuts are supportive of a stronger US dollar, which has been instrumental in the depreciation of the rand.
The Citizen previously reported that economists and analysts are predicting that the presidency of Donald Trump would be a net negative for the rand when the United States’ president-elect takes office on 20 January.
For South African motorists, this could impact the trajectory of fuel price recoveries in 2025.
ALSO READ: Finally…some festive fuel-good: Close to R1 drop in petrol price kicks in for Bay motorists
The Department of Mineral and Petroleum Resources has made a point in the past of reminding consumers that the daily CEF snapshots are not predictive and 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.
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