South African motorists may face both increases and potential moderation in petrol and diesel prices for November 2024, depending on the fuel type.
- UPDATE: The Department of Mineral Resources and Energy released the final adjustments to fuel prices, coming into effect on Wednesday, 6 November 2024. See the update below.
Story Summary:
- Petrol 95 ULP shows an under-recovery of 47.357 cents per litre.
- Diesel 0.05% records an under-recovery of 25.926 cents per litre.
- Global oil prices are expected to average $80 per barrel in the last quarter of 2024.
Petrol price outlook for November 2024
The Central Energy Fund’s (CEF) data shows a blend of under-recoveries and over-recoveries across fuel types, suggesting an uneven adjustment ahead.
- Petrol 93 ULP has an over-recovery of 7.225 cents per litre, indicating a possible slight decrease in this type of fuel.
- Petrol 95 ULP and Diesel 0.05% both show under-recoveries, suggesting price increases are still likely.
- Easing geopolitical tensions in the Middle East have moderated global oil prices, providing some potential relief in the coming month.
The mixed recovery values reveal that, while some fuel types like Petrol 93 ULP may see minor price drops, other fuels such as Petrol 95 ULP (3.418 cents under-recovery) and Diesel 0.05% (9.112 cents under-recovery) are still facing cost pressures.
The latest global oil prices play a major role in these projected adjustments.
Here’s a closer look at the over/under-recovery rates, as of Monday, 28 October 2024:
Fuel type | Official | Adjustment on 28/10/202`4 | Adjustment on 21/10/2024 | Adjustment on 14/10/2024 | Adjustment on 07/10/2024 |
Petrol 95 | -R0.25 | -R0.03 | -R0.47 | -R0.93 | -R0.70 |
Petrol 93 | -R0.25 | -R0.07 | -R0.31 | -R0.78 | -R0.55 |
Diesel 0.05% | -R0.21 | -R0.09 | -R0.26 | -R0.77 | -R0.83 |
Diesel 0.005% | -R0.20 | -R0.05 | -R0.24 | -R0.75 | -R0.81 |
How oil prices affect the November forecast
In October, global oil prices saw some relief after escalating tensions in the Middle East, particularly between Israel and Iran, eased slightly.
Brent crude oil, a key global benchmark, recently dropped to around $72.3 per barrel, reversing its earlier climb due to reduced fears over potential oil supply disruptions
This decrease in oil prices has provided temporary relief, though OPEC+ production cuts remain in place, keeping global supply limited.
Experts expect prices to stabilise around $80 per barrel through the last quarter of 2024, a moderate level compared to earlier spikes.
What does this mean for consumers?
For South African consumers, this mixed outlook means that fuel price adjustments in November 2024 may vary depending on the fuel type.
Petrol 93 ULP could see a minor decrease due to its over-recovery, but Petrol 95 ULP and Diesel are likely to see price increases, albeit smaller than previously anticipated if oil prices remain stable.
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 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.
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, 5 June 2024.
Disclaimer: The petrol price forecasts provided in this article are based on speculative data and should be considered as such. The information has been sourced from the Central Energy Fund, and while we strive to present the most accurate and up-to-date information, Swisher Post does not guarantee the accuracy, completeness, or timeliness of the data. Prices can fluctuate due to a variety of factors beyond our control, including but not limited to changes in international oil prices, currency exchange rates, and government taxes. Therefore, Swisher Post shall not be held liable for any discrepancies or differences in the actual prices. Readers are advised to consult official sources for the most current petrol price information.