Down: Petrol price. Picture: Itumeleng English
Experts said a fifth consecutive fuel price could be on the cards for October, with the current mid-month data indicating that the price could decrease by more than R1 a litre.
This would bring the fuel price to below R21 – its lowest level since early 2022.
Economists attribute the predicted drop to the lower international prices of Brent crude oil and a stronger rand.
South Africa has faced challenges of increasing fuel prices in the last two years, with the price reaching a high of R25 in October 2023.
Speaking to The Mercury, Old Mutual Group chief economist Johann Els said the petrol price seems to be headed to a R1.20 to R1.30 decrease in October.
“The rand has been strong and stable but more importantly the price of Brent Crude has dropped from 80 dollars a barrel a month ago and currently sits at about 72 dollars a week, which is still good. The stronger rand and lower oil price have led to significant over recoveries in the petrol price.”
Els said the combined rand/oil price has fallen 10.5% from the end of August until now.
“So the daily over-recoveries on the petrol price sit at 128 cents a litre and the average sits at 115 cents a litre, which indicates that there could be a large petrol price decrease in October. I also expect inflation to remain at 4.6% when CPI is announced this week.
“We should see a 25 basis point interest rate cut this week and should expect inflation to fall further due to the petrol price decrease expected in October.”
yogashen.pillay@inl.co.za
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