South African motorists should prepare for possible increases in fuel prices for December 2024.
UPDATE: The Department of Mineral Resources and Energy released the final adjustments to fuel prices, coming into effect on Wednesday, 4 December 2024. See the update below.
Story Summary:
- Petrol prices in South Africa are likely to increase in December 2024, with 95 ULP showing an under-recovery of 17.403 cents per litre.
- Diesel prices could see a larger increase, with under-recoveries of 52.733 cents per litre for 0.05% sulphur and 58.917 cents per litre for 0.005% sulphur.
- Rising global oil prices, currently at $75 per barrel, and a weaker Rand averaging R18.15 per dollar are driving up fuel import costs
Final fuel price outlook for December 2024
According to the Central Energy Fund (CEF), all fuel types are currently under-recovered, indicating a potential rise in costs at the pump.
- Petrol 95 ULP has an under-recovery of 17.403 cents per litre, suggesting a likely increase in price.
- Diesel 0.05% shows an under-recovery of 52.733 cents per litre, indicating a steeper increase for diesel users.
- Rising global oil prices and a weaker Rand are compounding the cost of importing fuel.
The under-recovery means that fuel prices at the pump are lower than the actual costs of importing fuel, which is why price adjustments are expected.
Here’s a closer look at the over/under-recovery rates, as of Monday, 25 November 2024:
| Fuel type | Official | Adjustment on 25/11/2024 | Adjustment on 18/11/2024 | Adjustment on 11/11/2024 |
| Petrol 95 | -R0.17 | -R0.17 | -R0.06 | +R0.24 |
| Petrol 93 | -R0.17 | -R0.15 | +R0.09 | +R0.36 |
| Diesel 0.05% | -R0.55 | -R0.53 | -R0.50 | -R0.15 |
| Diesel 0.005% | -R0.56 | -R0.59 | -R0.51 | -R0.13 |
How oil prices affect the December forecast
Global oil prices have been on the rise, adding pressure to local fuel costs. Brent crude oil, a key benchmark, is currently trading at around $75 per barrel. This increase is driven by geopolitical factors such as ceasefire negotiations in the Middle East and continued production limits set by OPEC+ nations.
Additionally, the South African Rand has weakened against the US Dollar, averaging R18.15 per dollar in recent weeks. A weaker currency makes it more expensive for South Africa to import oil, further driving up fuel prices locally.
What does this mean for consumers?
For South African consumers, December is likely to bring higher costs for all fuel types.
Petrol prices, including 95 ULP and 93 ULP, will likely increase due to under-recoveries of 17.403 cents and 14.516 cents per litre, respectively.
Diesel prices may face larger hikes, with under-recoveries exceeding 52 cents per litre.
Illuminating paraffin, crucial for many low-income households, also shows an under-recovery of 36.753 cents per litre.
The next changes will take effect on Wednesday, 4 December 2024.
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
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.
