October fuel price outlook: good news for petrol, great news for diesel
JOHANNESBURG - Following a stagnant September preceded by months of fuel price increases, there finally appears to be some good news for South African motorists, with mid-month data from the Central Energy Fund pointing to decreases for both petrol and diesel in October.
Currently, the Automobile Association is predicting a price cut of between 26 and 36 cents a litre for petrol and 88 cents for diesel. While that prediction is based by the current average for the month so far, if one looks at the most recent daily price data, it is certainly plausible that the price cuts could be closer to 50 cents a litre in the case of petrol and over a rand for diesel, although that’s assuming that current oil price and rand trends continue until the end of this month.
95 Octane Unleaded petrol currently retails at R14.48 at the coast and R15.16 inland, where the slightly cheaper 93 ULP retails at R14.89.
Petrol is still cheaper than it was at the beginning of the year when 95 Unleaded hit R15.52 at the coast, but it’s still almost R3 more expensive than it was in May this year after oil prices tumbled due to the Covid-19 pandemic.
The AA explains that the local currency and international oil prices are both working in the favour of South African motorists.
"The rand has put on a remarkable rally against the US dollar in recent weeks, with the daily exchange rate strengthening from R17.30 on August 21 to R16.70 on August 31 and since the start of September, the rand has traded in a commendably tight range by recent standards," the AA said.
“At the same time the Rand was advancing, international oil prices were beating a retreat, with the landed price of refined fuels in South Africa slipping by more than ten percent since September 1,” the association added.
However, it cautioned that oil prices would likely continue to see-saw as world oil demand and supply gradually re-balance following the Covid-related turmoil that took place earlier this year.
Brent Crude oil was trading at R40.14 at the time of writing, while the rand was trading at R16.44 to the US Dollar.