South African motorists could see a drop in petrol and diesel prices in October 2024 based on the latest data from the Central Energy Fund (CEF).
- UPDATE: The Department of Mineral Resources and Energy released the final adjustments to fuel prices, coming into effect on Wednesday, 2 October 2024. See the update below.
Story Summary:
- Petrol 95 ULP shows an over-recovery of R0.97 per litre.
- Diesel 0.05% records an over-recovery of R1.11 per litre.
- Global oil prices, which recently fell but are expected to rise again, could impact the final price.
Semifinal petrol price outlook for October 2024
The over-recovery means that, on average, the cost of importing fuel is less than the benchmark price, signalling a chance for lower prices at the pump.
However, this expected decrease could be influenced by fluctuating global oil market trends.
Here’s a closer look at the over/under-recovery rates, as of Tuesday, 24 September 2024:
| Fuel type | Official | Adjustment on 24/09/2024 | Adjustment on 16/09/2024 | Adjustment on 09/09/2024 |
| Petrol 95 | +R1.14 | +R0.97 | +R1.12 | +R1.11 |
| Petrol 93 | +R1.06 | +R0.91 | +R1.05 | +R1.04 |
| Diesel 0.05% | +R1.14 | +R1.14 | +R1.24 | +R1.02 |
| Diesel 0.005% | +R1.12 | +R1.06 | +R1.18 | +R0.96 |
How oil prices affect the October forecast
Although the current over-recovery points to a potential price drop, global oil prices will have a significant impact on the final decision. In early September, Brent crude oil prices fell to around $70 per barrel due to declining demand from China and other economic concerns.
However, these prices are expected to rise again to around $82 per barrel by the end of the year.
The OPEC+ group, which includes major oil-producing countries, has reduced oil production to prevent prices from falling too low.
This action has caused global oil inventories to decrease, which may result in higher prices in the coming months.
According to forecasts from the US Energy Information Administration (EIA), oil prices could rebound and remain within the $80 to $90 per barrel range.
Another factor is the ongoing uncertainty in global supply, such as recent production outages in countries like Libya.
These factors could push oil prices back up, potentially limiting the extent of any decrease in local fuel prices.
What does this mean for consumers?
For motorists, this means there is still a strong possibility of a decrease in fuel prices in October, but the extent of this decrease might be smaller than initially expected.
While over-recovery data suggests that fuel costs should drop, rising global oil prices and reduced production by OPEC+ might offset these potential savings.
In practical terms, consumers should be prepared for a potential decrease in fuel prices in October but remain cautious about expecting a significant drop.
Factors such as global oil price trends and production cuts will continue to play a crucial role in determining the final price motorists will pay at the pump.
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.
