The price of petrol could fall by up to 42 cents per litre on 5 November and the wholesale price of diesel is expected to fall by approximately 58 cents, the Solidarity Research Institute (SRI) said on Tuesday (21 October).
These reductions would take the price of 93 octane petrol in Gauteng to approximately R13 per litre and the wholesale price of diesel to below R12 per litre – levels last seen in December 2013.
The projection of the reduction in fuel prices is based on the rand-dollar exchange rate and the international prices of petroleum products.
According to the Central Energy Fund, which tracks the over/under recovery of fuel prices, the latest data also points to a price drop in November.
Current over-recovery stands at:
* Petrol 95 ULP – 25.93 cents
* Petrol 93 ULP – 31.16 cents
* Diesel 0.05% – 45.20 cents
* Diesel 0.005% – 44.72 cents
Paul Joubert, senior economic researcher at the SRI, explains that the weakening of the rand worked against a decline in local fuel prices.
He says the rand traded at approximately R10.89 against the American dollar on average in September.
In spite of the strengthening of the rand during last week, the rand has traded at an average of around R11.19 against the dollar to date in October.
“Fortunately, international petroleum product prices, the other factor that determines local fuel prices, also declined along with oil prices in the course of the month,” Joubert says.
The price of Opec oil, which was $96.45 a barrel in September, has averaged nearly 9% lower at $88.10 a barrel in October so far.
Joubert says the relevant period for calculating November’s local fuel prices only ends on Thursday, 30 October.
He indicates that, should the rand or oil prices experience large fluctuations between now and then, the fuel price adjustments in November could deviate significantly from this projection.
The Department of Energy will announce the final fuel price changes on 31 October.