Fuel Price Forecast for March
Petrol and Diesel prices in South Africa are anticipated to witness significant increases at the beginning of March, as per the latest estimate from the Central Energy Fund (CEF).
Projected Price Hikes:
- 95 Unleaded Petrol: An estimated increase of R1.36 per litre.
- Wholesale Diesel: Expected to rise between R1.43 and R1.58 per litre.
- Illuminating Paraffin: Likely to see an increase of almost a rand.
Factors Influencing Prices:
South African fuel prices are closely tied to international oil costs and the rand exchange rate, with oil priced in dollars. The recent surge in Brent crude oil from $77 to $81 a barrel is contributing to the impending price hikes.
Global Factors Impacting Fuel Price:
- Red Sea Oil Cargo Attacks: Disruptions leading to oil cargo rerouting, particularly around the Cape of Good Hope, resulting in increased shipping rates.
- US Cold Weather Impact: Cold weather affecting oil output in the United States.
- Output Cuts and Demand Concerns: While output cuts by major producers support oil prices, the International Energy Agency warns of diminishing demand, potentially leading to a surplus in oil markets.
Rand Exchange Rate Fluctuations:
The rand’s value against the dollar has fluctuated from R18.57/$ at the start of the month to R19.21, reflecting concerns about delayed US interest rate cuts. The current rate is R18.96.
Uncertain Outlook and Call for Review:
The final determination of petrol and diesel prices for March will be made at the end of February. The Automobile Association emphasises the need for a review by the Department of Mineral Resources and Energy to explore potential revisions in the pricing model. Particularly, a review of diesel prices is crucial to mitigate higher input costs affecting consumer goods prices.
Appeal to Minister of Finance:
The Automobile Association calls on the Minister of Finance to consider avoiding increases in the General Fuel and Road Accident Fund levies during the upcoming Budget Speech on 21 February. Any relief, even in the form of non-increases, would be beneficial for a consumer base already grappling with economic challenges.
Recent Price Adjustments:
In early February, both grades of unleaded petrol (93 and 95) saw a hike of 75c per litre. This brought the Gauteng price of 95 unleaded petrol to R23.24 a litre, while the coastal price reached R22.52. Wholesale diesel prices increased by 70c to 73c, resulting in the Gauteng diesel price at R21.36 a litre and the coastal price rising to R20.64.
