A significant drop in petrol prices is expected in South Africa for October, according to data from the Central Energy Fund (CEF) for the second week of September. The stable market conditions indicate that both petrol and diesel prices could see substantial reductions next month.
The data shows an over-recovery in fuel prices, with petrol prices expected to drop by between R1.22 and R1.30 per litre, while diesel prices could fall by R1.11 to R1.13 per litre. This over-recovery, which measures the difference between what consumers are paying and the actual cost of fuel, remains largely unchanged from the beginning of September.
Key figures from the CEF include:
Petrol 93: over-recovery of 122 cents per litre
Petrol 95: over-recovery of 130 cents per litre
Diesel 0.05%: over-recovery of 111 cents per litre
Diesel 0.005%: over-recovery of 113 cents per litre
Illuminating paraffin: over-recovery of 105 cents per litre
Despite slight fluctuations in the rand and oil prices, market conditions have remained fairly steady. The rand saw some volatility, moving between R17.70 and R18.00 to the dollar, before stabilizing at around R17.75. Meanwhile, oil prices have remained relatively weak, trading at around $72.50 per barrel, slightly down from earlier in September.
Experts attribute the weaker oil prices to reduced global demand, particularly in China, where the economy has slowed. The International Energy Agency (IEA) reported that global consumption growth in the first half of the year was the lowest since the pandemic. OPEC+ has also delayed plans to ease supply restrictions due to the lower demand outlook.
In addition to these global factors, Investec’s chief economist, Annabel Bishop, noted that the drop in petrol prices—similar to September’s 92c/litre decrease—will help lower inflation when consumer price index (CPI) data is released in October.
Looking ahead, there are expectations that the US Federal Reserve will cut interest rates, which could further affect global energy demand and contribute to ongoing fluctuations in the rand. However, the anticipated fuel price reduction in October remains good news for South African consumers, offering some relief from the country’s high cost of living.
