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Monday, 16 August 2021 10:32

CEF points to another petrol price increase in September.

Staff Reporter.

Mid-month data from the Central Energy Fund points to another petrol price increase in September, however, the price of diesel is forecast to come down.

The CEF data shows a slight under-recovery for both petrol grades, pointing to a 2 to 7 cents per litre hike, while diesel prices are showing an over-recovery of around 12 cents per litre.

  • Petrol 95: increase of 7 cents per litre;
  • Petrol 93: increase of 2 cents per litre;
  • Diesel 0.05%: decrease of 12 cents per litre;
  • Diesel 0.005%: decrease of 12 cents per litre;
  • Illuminating Paraffin: decrease of 7 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.

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-August, a weaker ZAR/USD exchange rate is contributing to an under-recovery of around 2 cents per litre for all fuel types, with changes to international product prices remaining fairly flat.

Differences in price and refining costs for petrol and diesel create a divergent path on pricing, with diesel seeing an over-recovery of 14 cents per litre in product price changes.

The rand has had a volatile few weeks in trade against the dollar, suffering a significant hangover from the riots that hit the country in mid-July and the level 4 lockdown which was in effect for much of the period.

While the rand started August in a much stronger position, trading around R14.40, it has continued to weaken as key international markets suffer their own Covid-19 woes – driven by the delta variant – as well as political changes locally.

South Africa has also had to contend with pressing domestic issues, such as the third wave of Covid-19, which is peaking in the Western Cape, while cases are surging in KwaZulu-Natal.