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South Africa Braces for Petrol Price Hike as Crude Oil Hits 3-Year High

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Luis Monzon
Luis Monzon
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Last week, South Africa’s Central Energy Fund (CEF) published its mid-month report showing that petrol prices in the country were set for a small decline in October to the brief relief of motorists who have been dealing with some of the highest fuel prices in SA’s history.

However, the CEF stressed that the data was not entirely predictive, and did not account for major changes that can affect petrol prices such as slate levy adjustments or retail margin changes, which are both determined by SA’s Department of Energy. Another indicator of heightened petrol prices would be any changes to the international market.

Now, it seems this will be the case, as South Africa is expecting increased fuel prices due to a bump in international Brent crude oil which jumped to $80 on Tuesday, according to Independent Media.

The $80 price represents the first time in almost three years that crude oil has hit this high, which come on the back of expectations for a renewed surging demand and concerns about supplies as the world slowly begins to emerge from the economic hardships imposed on the world by the pandemic as more countries increase their inoculations and lessen lockdowns.

“It looks like the oil rally has still got some legs,” said John Driscoll of JTD Energy Services, quoted by Independent Media.

“I just don’t see any evidence yet that the rally has topped out,” he added.

Currently, it is not clear how SA’s October fuel prices will be affected by the crude oil hike, but the small petrol price decrease expected by the CEF and South Africa’s Department of Energy may not come to fruition. The local currency is also not aiding this, as the rand experienced a weakening from R14.15 at mid-month to R15,08 as of the time of writing on 29 September 2021.

The Department is set to release its month-end data report by the end of this week which will paint a better picture of October’s petrol, diesel and illuminating paraffin prices.

By Luis Monzon
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