Big petrol and diesel price hikes looking likely for March

13 February 2024 | Economic factors

By: Jason Woosey - Editor, IOL Motoring

Motorists and commuters could be in for more hard times in the coming months, with the latest data pointing to significant petrol and diesel price hikes in March.

The latest unaudited data from the Central Energy Fund (CEF) implies that 95 Unleaded petrol could go up by around R1.35 per litre next month, with 93 Unleaded rising by R1.31.

The outlook is even more bleak for diesel, which looks set to rise by between R1.44 (500ppm) and R1.58 (50ppm).

Keep in mind that these are mid-month predictions and that any movements in the local currency and international oil prices in the coming two weeks could push those figures higher or lower.

However, should the above predictions prove to be accurate, South Africans will end up paying R23,87 for a litre of 95 ULP at the coast and R24.59 in Gauteng, where 93 ULP will rise to about R24.23.

The wholesale price of 50ppm diesel, meanwhile, could rise to around R22.30 at the coast, which is likely not good news for general inflation, given the transport costs associated with virtually everything.

These projected increases follow February’s price hikes of 75 cents for petrol and up to 73 cents for diesel.

High international oil prices are the main driver of the under-recovery that has pushed the local fuel price equation far into the red this month, while a weaker rand is currently contributing around 10 cents per litre to the deficit.

Brent Crude oil was trading at $82 per barrel at the time of writing on February 13, while the rand was at $18.91 to the US dollar.

After settling below the $80 mark earlier in the month, oil prices rose by 6% last week for a number of reasons, including Israeli Prime Minister Benjamin Netanyahu’s rejection of a Hamas ceasefire proposal, Reuters reported.

"With the words that, 'no part of the Gaza Strip would be immune from Israel's offensive', it was not hard for oil participants to conclude that without even a passing regard for peace, there was not enough conflict-premium priced in," said analyst John Evans.