Oil prices may be rising but the cost of fuel will still come down significantly in September. Picture: Alexandra Koch / Pixabay.
South Africans can look forward to significant fuel price relief in September, with both petrol and diesel price decreases on the table, but the downward trend could come to an end in October if oil prices continue to tick upwards.
Unaudited data from the Central Energy Fund (CEF), released on August 27, shows that petrol price decreases of between 83 cents (93 Unleaded) and 90 Cents (95 Unleaded) are likely for September.
Diesel is looking set for decreases of between 72 cents (500ppm) and 98 cents (50ppm).
Although the outlook could shift in the coming week, and the Slate Levy may have a bearing, it’s unlikely that the above mentioned numbers will change significantly at this late stage of the month, despite international oil prices being on an upward march this week.
South Africans will know for certain when the Department of Energy announces the official fuel price adjustments for September early next week, which will come into effect on Wednesday, September 4.
Brent crude oil, which has hovered at $79 (R1,403) or below for most of August, rose by 3% on Monday to close at $81.43 per barrel on Monday, on news of production cuts in Libya and reports of escalating conflict in the Middle East, Reuters reported.
"The biggest risk for the oil market is probably a further drop in Libyan oil production due to political tensions in the country, with a risk that production could fall from current levels of 1 million barrels per day to zero," said Giovanni Staunovo, analyst at Swiss bank UBS.
Although October’s fuel price scenario is too early to predict, any further rises to the price of Brent crude could put an end to the current cycle of fuel price decreases, possibly even warranting an increase.
However, a strong rand is currency lending support to the fuel price outlook, with the local currency trading at R17.76 on Tuesday, August 27, well down from its average of R18.23 recorded in August.
A decrease in the region of 80 cents in September will bring petrol prices below where they were in January.
Following the August decrease of 15 cents, 95 Unleaded petrol currently retails for R22.32 at the coast and R23.11 in the inland regions, where 93 Unleaded is priced at R22.71.
Stay tuned to IOL in the coming week for the official price adjustments for next month.
Related Topics: