With just a week left before fuel prices are calculated for August, it looks like a foregone conclusion that petrol will become slightly more expensive. However, people with diesel vehicles are going to pay a lot more.
Thanks to the stronger rand over the past week, the price increase will not be as large as expected in the middle of the month.
The Central Energy Fund’s (CEF) latest report indicates an under-recovery for the period under review so far.
The average under-recovery, ie by how much the price would have to rise if it were to be fixed today, is currently just under 15c per liter for 95-octane petrol and 18c for 93-octane petrol.
However, for diesel with a sulfur content of 0.005%, the recovery is 52c. This under-recovery is on the wholesale price, as the retail price of diesel is not regulated as for petrol.
The review period runs until Thursday 30 July, after which prices change on Wednesday 5 August.
The under-recovery is currently being negatively impacted by the systematic recovery of international oil prices.
In June, Brent crude oil became 26% more expensive after months of depressed prices due to lower fuel demand in countries hit hard by the Covid-19 pandemic.
In July, the price of Brent crude oil averaged around $ 43. By Friday morning, that price was $ 43.65 – the highest in more than four months.
The CEF’s data show that the price of Brent crude oil is currently responsible for a 23c under-recovery on 95-octane petrol, which is only being pushed down by the stronger rand.
The rand strengthened by almost 2% against the dollar so far in July and stood at R16.73 at 11:40 on Friday.
Thanks to this, the improving exchange rate is in turn responsible for an over-recovery on fuel that helps keep August’s expected price rise in check.
Meanwhile, the prevailing diesel shortage has also improved to some extent.
“Diesel supply has stabilized relatively, but is not yet at levels where we want it to be,” he said.
dr. John Purchase, executive director of the agricultural business chamber Agbiz, told Landbouweekblad .
Farmers can therefore expect diesel to be readily available in August, but at significantly higher prices.