South African motorists may soon find some relief at the pumps as early data for October shows a strong start for fuel price recoveries, raising hopes of potential petrol cuts in November.
Thank you for reading this post, don't forget to subscribe!According to the Central Energy Fund (CEF), both petrol and diesel prices have begun the month with over-recoveries, suggesting that current market conditions could pave the way for a downward adjustment in next month’s fuel prices.
Positive Start for October
Preliminary figures indicate that petrol is showing an over-recovery of between 38 and 42 cents per litre, while diesel is recording a smaller over-recovery of around 5 cents per litre.
Although it’s still too early to make firm predictions about November’s fuel prices, analysts say that a positive start often signals the potential for reductions provided market conditions remain favourable.
However, if the rand weakens or global oil prices rise sharply in the coming weeks, these gains could be erased. Conversely, continued improvements in both areas could lead to even larger price cuts for motorists.
Lessons from September
September offered a clear example of how quickly trends can shift. The month began with negative recoveries, but a stronger rand and stable oil prices helped improve the outlook by month-end.
Even though October saw a small price increase, this was mainly due to wage adjustments for petrol station workers, not market performance. October also ushered in a new pricing quarter, where additional adjustments take effect, adding complexity to the usual analysis of the rand-dollar exchange rate and crude oil prices.
Projected Price Movements (Early October Data)
| Fuel Type | Projected Change (per litre) |
|---|---|
| Petrol 93 | ↓ 42 cents |
| Petrol 95 | ↓ 38 cents |
| Diesel 0.05% (wholesale) | ↓ 6 cents |
| Diesel 0.005% (wholesale) | ↓ 4 cents |
| Illuminating paraffin | ↑ 3 cents |
What to Watch in October
The final outcome for November’s fuel prices will depend heavily on two factors the rand/dollar exchange rate and global oil market trends.
Oil prices, which have fluctuated throughout the year, are currently down about 10% year-to-date. After hovering near $66 per barrel in August and September, prices briefly rose to $69 before dipping below $65 this week marking the biggest weekly drop since June.
Analysts expect that a looming OPEC+ meeting, likely to result in higher oil supply, could push prices even lower. This shift toward oversupply might keep downward pressure on fuel costs globally.
Rand Strength Supporting Recoveries
The South African rand has recently strengthened against the US dollar, even testing levels near R17.00/$, largely due to a weaker dollar rather than domestic economic strength.
The dollar’s decline has been driven by softening US job data and expectations of further rate cuts in the world’s largest economy. While the rand remains undervalued by international standards estimated fair value around R14.50/$ its relative resilience has been a welcome support for local fuel recoveries.
Should South Africa manage to boost investor confidence through trade deals or economic reforms, the rand’s performance could improve further, potentially translating into bigger petrol price cuts in the months ahead.
Outlook:
With oil prices softening and the rand showing stability, motorists may finally see relief at the pumps in November provided the current recovery trend continues through October.
Related article: Motorists Warned of Petrol Price Hike Coming in October
