Fuel price: Trouble for petrol while diesel could take another dip in May

It looks as if Mzansi motorists will be in for some more pain at the pumps in May as petrol prices show a current under-recovery (Read: increase) of around 29 and 30 cents per litre.

The dismal forecast means that a fourth consecutive hike could become a reality in May.

Petrol prices have increased by a R1.80 so far this year, with hikes in February, March and April. This after the year started on a high note with a welcome 76c per litre cut in January.

ALSO READ: South Africans stretched thin as fuel, food and electricity costs soar

May fuel price: Expected changes for petrol, diesel and paraffin

The latest data from the  Central Energy Fund (CEF) at least points to some good news for diesel users with diesel prices currently showing an over-recovery (Read: drop) of around 35 cents per litre.

• Petrol 93: Increase of 29 cents per litre;
• Petrol 95: Increase of 30 cents per litre;
• Diesel 0.05% (wholesale): Decrease of 29 cents per litre;
• Diesel 0.005% (wholesale): Decrease of 33 cents per litre; and
• Illuminating paraffin: Decrease of 22 cents per litre.

Inland and coastal: The toll of three months’ petrol price hikes…

The price of 95 octane petrol has increased by R2.63 per litre in Gauteng over the past three months which translates into an eyewatering R1256 to fill up a 50-litre tank.

In coastal areas, the total increase came to R2.56 per litre and R1216.50 for a 50-litre tank of petrol.

ALSO READ: Govt’s diesel rebate faces scrutiny as manufacturers find costs outweighing benefits

Crucial factors: Rand/dollar, oil prices

Fuel prices are usually adjusted on the first Wednesday of a month and are primarily determined by the international price of oil and the rand/dollar exchange rate.

According to BusinessTech, the main driver behind higher prices is the rising price of global oil which is undercutting the recent rand strength.

The rand’s relatively weaker position against the greenback in the first quarter of the year ( around R19/$) has also done no favours for fuel price recoveries in South Africa.

The steady rise in the global oil price over the past few months has been fueled by the Gaza war, as well as escalating geopolitical tensions in Russia and Ukraine.

The ongoing Israel-Hamas conflict have also unsettled Middle East markets and the prospects of an increase in supply due to an expansion of producers outside OPEC during 2024.

For example, supply cuts by oil-producing nations (OPEC+) have even put $100 a barrel on the radar for some analysts, spelling even more trouble for fuel prices ahead.

“Brent is around 17% higher this year, in part due to OPEC+ supply cuts,” Bloomberg reported.

• At the time of writing on 12 May, the rand was trading at R18.75 against the US dollar, about 0.2% weaker than its previous close.
• The price of Brent Crude Oil stood at $90.66 per barrel.

ALSO READ: Fuel price increase, hot weather threaten SA food security

When will the DMRE announce official fuel price?

The Department of Mineral Resources and Energy (DMRE) 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 on the 25th of April.

• The official fuel price adjustments will come into effect on Wednesday, 1 May.