By Lehlohonolo Lehana.
Mid-month data from the Central Energy Fund (CEF) points to a sizeable petrol price hike in December 2022, with diesel drivers on course for a slight reprieve.
The data, which serves as a snapshot of market conditions as of 14 November 2022, shows that the petrol price could climb by around R1.00 per litre in December. Diesel, meanwhile, shows a slight over-recovery – thus a potential decrease of between 26 and 35 cents per litre.
The mid-month snapshot is as follows:
- Petrol 93: increase of 98 cents per litre;
- Petrol 95: increase of 109 cents per litre;
- Diesel 0.05%: decrease of 35 cents per litre;
- Diesel 0.005%: decrease of 26 cents per litre;
- Illuminating Paraffin: increase of 31 cents per litre.
The Department of Energy has stressed that the daily snapshots are not predictive and do not cover other potential changes like slate levy adjustments or retail margin changes, which are determined by the department at the end of the month, taking all variables into account.
The DoE makes adjustments based on a review of the entire period. Furthermore, the outlook can change significantly before month-end. Ultimately, the expected price changes are contingent on current market conditions persisting through the end of the month.
Local fuel price fluctuations are impacted by two main factors – the international price of petroleum products, driven mainly by oil prices, and the rand/dollar exchange rate used to purchase these products.
In the first half of the month, oil prices have remained high, thus contributing to a significant under-recovery for petrol in particular. Following a big jump in petroleum product prices for diesel, costs have started reducing. Meanwhile, a stronger rand has helped alleviate petrol and diesel stresses.
The process of deregulating the price of 93 octane petrol in South Africa is currently underway after the move gazetted by Mineral Resources Minister Gwede Mantashe in July.
Government previously indicated its intention on the matter, saying the deregulation plans would only occur once the Treasury figures out how to recover the R90 billion loss from the fiscus it would see if fuel taxes were removed in one go.
Finance Minister Enoch Godongwana revealed that there were many options on the table to achieve this, such as additional taxes on motor licence renewal fees to fund the Road Accident Fund (RAF).
There had been talks of the RAF levy being scrapped from the fuel levy and moving elsewhere, which has been backed by Parliament’s Portfolio Committee on Mineral Resources and Energy.