Mid-month data from the Central Energy Fund points to a marginal petrol price hike in June, while diesel could see a more sizeable increase.
The CEF data shows an under-recovery for both 93 and 95 petrol, with prices expected to rise no more than a few cents per litre. Diesel drivers, meanwhile, can expect an increase for 0.05% and 0.005% at around 19 cents per litre.
- Petrol 95: increase of 1 cent per litre;
- Petrol 93: increase of 2 cents per litre;
- Diesel 0.05%:increase of 18 cents per litre;
- Diesel 0.005%: increase of 19 cents per litre;
- Illuminating Paraffin: increase of 25 cents per litre.
While the mid-month data serves as a snapshot, the Department of Energy makes adjustments based on a review of the full period. Furthermore, the outlook can change significantly before month-end.
The mid-month prices provide a strong indication of moving trends, however. Prices are affected by two main components – the rand/dollar exchange rate, and changes to international petroleum product costs, largely driven by oil prices.
At mid-May, the stronger ZAR/USD exchange rate is contributing to an over-recovery of around 10 cents per litre – however, changes to international product prices are swallowing up those gains, leading to diverging trends for petrol and diesel.
Product prices for petrol have remained high, but flat, contributing to a 12 cents per litre under-recovery in the price. Prices for diesel and illuminating paraffin are showing a 28 cents and 35 cents per litre under-recovery.
The rand has rallied in May, even dipping under R14 against the dollar at the start of the week.
The rand’s strength has largely been driven by dollar weakness, rather than any overly positive local news, though the decision by ratings firm, Moody’s, to skip the expected review of South Africa’s sovereign debt served as a boon for skittish investors.
According to Reuters analysis, the rand has been on a strong run since March, prompted by lower rates in the developed world, a surge in global commodity prices, and signs the local economy is on track for a better-than-expected recovery.