February fuel price prediction - it's mostly bad news
JOHANNESBURG - South African motorists are likely to face a small increase in the prices of all fuels except 95 Octane petrol, the Automobile Association predicts.
Commenting on mid-month fuel price data released by the Central Energy Fund, the AA said that should current trends persist, the price of 95 Octane Unleaded petrol should drop by about eight cents a litre at the beginning of February, while 93 Octane will rise by one cent a litre. This will narrow the price gap between the two grades of petrol in the inland regions, where 93 currently sells for R15.84 a litre and 95 for R16.16. 95 ULP is the only grade available at the coast, where it costs R15.52.
Diesel looks set for a 13 cents a litre hike for both grades, from the first Wednesday of February.
However, given the recent volatility in both the South African currency and the international crude oil market, it is becoming increasingly difficult to predict where fuel prices are heading.
"International oil prices surged by nearly two dollars a gallon in late December 2019 before beginning a recovery which was halted by the recent tensions between the USA and Iran" the AA said.
"In the first week of January 2020, the two dollar mark was tested again, albeit with a slight recovery since."
The rand has also been on a roller coaster of late, having dropped as low as R13.95 to the US greenback at the tail end of December, before ticking back up. It was trading at R14.41 on January 15, however oil has also retreated from its near $70 highs recorded earlier in January, to trade at $64.41 at the time of writing.
If the tensions between the US and Iran continue to escalate it is likely to be bad news for local petrol prices given the vulnerability of oil fields in the Middle East.