South Africa’s monthly fuel price calculation often sits on a knife edge, with volatile oil and currency markets constantly threatening to send the outlook in either direction.
However, for September the fuel price prediction is very much stacked in favour of South African motorists, with the latest data suggesting that substantial decreases for both petrol and diesel could be in store if current trends persist until the end of August.
The latest figures released by the Central Energy Fund (CEF) on August 23 show strong over-recoveries that could result in decreases in excess of 86 cents for 95 Unleaded petrol, while diesel could fall by between 70 cents (500ppm) and 95 cents (50ppm).
In fact, if the latest daily figures are indicative of a more persistent trend, those decreases could grow, perhaps even beyond the R1 mark, by the time the official fuel prices are announced by the Department of Energy on Wednesday, September 4.
The 95 Unleaded petrol currently retails for R22.32 at the coast and R23.11 in the inland regions, where 93 Unleaded is priced at R22.71.
The projected price cuts would bring petrol prices below where they were at the beginning of 2024, which marked the start of a volatile fuel price cycle that saw petrol increasing by almost R3 between January and May.
The current over-recovery is driven mostly by lower international oil prices, with the stronger rand making a smaller contribution of five cents to the equation.
Brent Crude Oil was trading at $77 at the time of writing on August 23, while the rand was hovering around R17.96 to the US dollar.
A variety of economic factors have driven oil prices downward in August, including US recession fears earlier in the month, as well as weak Chinese data and easing Middle East tensions in recent days.