South African motorists can look forward to significant fuel price cuts in October, with adjustments expected next week.
According to unaudited data from the Central Energy Fund (CEF), this will be the fifth consecutive decrease in 2024.
The CEF’s figures indicate that ULP95 petrol will drop by R1.13 per litre, ULP93 by R1.05 per litre, diesel by R1.10 to R1.12 per litre, and illuminating paraffin by R1.08 per litre.
The Automobile Association (AA) said that the cumulative impact of these decreases is substantial. For example, ULP93 inland has seen a total reduction of R3.36 per litre over the past four decreases, saving about R168 on a 50-litre petrol tank.
If the expected October decreases materialize, the savings will amount to R220.50 for a 50-litre tank since May.
The AA attributed the projected reductions mainly to the drop in oil prices, with the stronger rand playing a smaller but still significant role. They also called for a transparent review of the fuel price structure, involving all stakeholders.
The Bureau for Economic Research (BER) noted that the continued strength of the rand and the dip in Brent crude oil prices have positively impacted local inflation, leading to lower fuel prices.
Brent crude traded near $72 a barrel, about 3.5% lower this week, influenced by reports that Saudi Arabia plans to increase production to regain market share.
The rand traded at around R17.10 against the dollar - showing a 20-month high - driven by an interest rate cutting cycle in the United States, and support from local confidence.
Johann Els, group chief economist at Old Mutual, believes the rand could break through the R15-to-the-dollar ceiling in the next three to six months. “The biggest driver of a firmer rand at present is an interest rate cutting cycle from the United States (US), which favours a stronger rand,” he said.
The official fuel pricing announcement for October by the Department of Mineral and Petroleum Resources is expected on September 30, ahead of the adjustment at midnight on 2 October.
Comments