The forecast for petrol prices in November 2023 brings some respite for South African motorists, according to the unaudited mid-month data from the Central Energy Fund (CEF) as reported by the Automobile Association (AA).
Petrol price forecast for November 2023: Major relief expected at the pumps
PLEASE NOTE: The petrol price adjustments listed below are directly quoted from the Central Energy Fund’s daily tracking of the basic fuel price (BFP) and do not necessarily reflect the final petrol price determined on the first Wednesday of every month. Despite our best efforts to ensure accurate reporting, it is still the sole responsibility of the reader to double-check petrol prices. Swisher Post, its parent company, partners and affiliates shall not be held liable for any consequence that arises from the journalistic duties performed in sharing this content
In a welcomed development, the preliminary figures from the CEF indicate that there’s a notable decrease in fuel prices on the horizon.
The data suggests that 95 Unleaded is slated to decrease by around R1.97 per litre, while 93 Unleaded is set to drop by around R1.92 per litre.
Additionally, diesel prices, which have been climbing for several preceding months, are anticipated to decrease by approximately 78 cents per litre.
Illuminating paraffin, a crucial commodity for many households, is also expected to become more affordable with a decrease of around 74 cents per litre.
The Automobile Association elaborated that these significant decreases are expected to arrive at a critical juncture for South Africans who have been grappling with the financial strain of filling up their vehicles and covering food costs amidst the previous cycles of fuel price hikes.
What is the driving force behind the petrol price forecast?
The driving force behind the anticipated reductions is attributed to more stabilised international oil prices, although the average weaker Rand-US Dollar exchange rate might temper some of the potential decreases, providing a less optimistic outlook than initially expected.
The petrol price forecast for November 2023 is especially reassuring for consumers in light of the diesel price decrease, which holds substantial implications for major sectors including agriculture, mining, and manufacturing.
The cost of diesel often significantly influences the prices of basic commodities, thus a decrease could potentially alleviate some economic pressures across these sectors.
However, it’s essential to note that there are still two weeks remaining before the official adjustment for November 2023, during which the upward trajectory of oil prices, potentially exacerbated by the ongoing conflict in Israel, could negatively impact the final fuel price adjustment.
The Department of Mineral Resources and Energy (DMRE) is set to announce the officially adjusted fuel prices which will come into effect on Wednesday, 1 November 2023.
What goes into the final retail price of fuel in South Africa?
Determining the final retail price of petrol in South Africa relies heavily on the rand’s performance in currency markets and oil price movements.
Using this information, the CEF can formulate basic fuel price (BFP) estimates which, in essence, offer South African importers a snapshot into the cost of buying petrol from an international refinery, transporting the product and ensuring it against possible losses at sea and on land.
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However, before the retail price of petrol is finalised at petrol stations, several additional costs are included in the BFP:
Government levies
- IP tracer levy (reimbursement to the oil industry for buying IP tracer dye and injecting it into IP to curtail the mixing of IP and diesel)
- General Fuel levy (tax levied by the government)
- Slate levy (to finance the cumulative under-recovery of the industry)
- RAF levy (to compensate for people involved in road crashes and accidents)
- Petroleum products levy (reimbursement to the pipeline users for the applicable NERSA tariff on transporting fuel through the pipeline)
Additional costs
- Wholesale margin (markup to the price of a product to account for wholesaling costs)
- Service cost recoveries
- Storage, handling and delivery costs
- Distribution costs
- Dealers margin (commission to the fuel pump dealers for retail operation)
- Zone differential (applicable to inland regions)
- Customs and excise duty
Monthly adjustments to fuel prices are made on the first Wednesday of each month based on these factors. The next changes will take effect on Wednesday, 2 August 2023.