September fuel price: Major hike for petrol and diesel could be even worse…

Believe it or not… the predicted massive hike in the September fuel price – affecting both petrol and diesel – has reached new heights.

According to the latest daily snapshot from the Central Energy Fund (CEF), the price of 95 unleaded petrol is set for a significant increase of R1.60 per litre, while diesel could spike by as much as R2.75.

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Fuel price continues upward trajectory

This in comparison to the already grim mid-month outlook which projected major increases for petrol of between R1.41/litre (for 93 unleaded) and R1.45/litre (for 95 unleaded); R2.60/litre for diesel and R2.55/ litre for paraffin.

Should the above predictions hold true when next month’s fuel price is officially determined on Monday, 4 September by the Department  of Minerals and Energy Resources (DMRE), motorists will be coughing up as much as R23.70/litre for 95 ULP at the coast.

In inland regions, such as Gauteng, it will add up to an eye-watering R24.43/litre and R24.03/litre (93 ULP) respectively.

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Painful flashback of July 2022 record-high fuel price

The last time Mzansi motorists experienced such pain at the pumps was as far back as July 2022, when the price of 95 ULP hit a high of R26.74/litre for inland users.

The Automobile Association of South Africa (AA) expressed concern at the knock-on effect of the surge in the fuel price on diesel users, the retail industry and the already stretched pockets of consumers.

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Rand/dollar and oil prices the main factors

The fuel price in South Africa is driven by two main role-players:

• Global oil prices; and
• The rand/dollar exchange rate. This is because crude oil is traded in US dollars. A weaker rand means fuel becomes more expensive to buy.

Currently, both the weaker rand and rising global oil prices are to blame for a significant under-recovery (read: massive increase) in the fuel price.

Although the rand has strengthened against the dollar this week – moving back below the R19/$ mark – global oil prices remain within the range of $85 a barrel for Brent Crude oil, according to BusinessTech. 

At the time of writing, the rand was trading at R18.58 to the dollar, while Brent Crude oil was listed at $85.53.

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DMRE has the last say

The DMRE, however, stressed that the daily CEF snapshots are not predictive and do not cover other potential changes, such as slate levy adjustments or retail margin changes, which could come into play when the official fuel price is determined.

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