South African motorists could face another steep increase in fuel prices next month, with petrol and diesel costs expected to reach record levels.
The current price of 95 Unleaded petrol at the coast is R26.05 per litre. According to industry experts, the price could rise by as much as R2.78 per litre, taking the pump price to approximately R28.83.
If this increase materialises, it would surpass the previous record of R28.06 per litre, which was reached in June this year.
Although international Brent crude oil prices have declined in recent days, the drop is unlikely to provide immediate relief to South African consumers when the October fuel prices are announced. Brent crude was still trading above $100 a barrel, reaching $101.08 on Monday.
Current fuel-price data indicates that petrol could increase by up to R2.78 per litre, while diesel may rise by as much as R3.00 per litre.
There is also no immediate government intervention planned to protect households and businesses from the impact of higher fuel costs. Mineral and Energy Minister Gwede Mantashe recently confirmed this position in Parliament.
South Africa's Basic Fuel Price (BFP) is calculated daily by the Central Energy Fund (CEF). Monthly fuel-price adjustments are based on the average daily BFP and the average rand-to-dollar exchange rate recorded during the review period.
According to Ntuli, changes in international oil prices take time to filter through to local pump prices. South African fuel prices generally lag global market movements by about a month.
With the October review period almost complete, most of the pricing calculations for next month have already been determined. This means the recent decline in crude oil prices will have only a limited impact on the October adjustment.
Ntuli also pointed out that, despite the recent fall, Brent crude remains significantly higher than the $87.88 per barrel recorded during the previous review period.
However, the recent movement in oil prices could have greater significance for the November adjustment.
Ntuli explained that if Brent crude remains around current levels or falls further before the end of October, and there is no major escalation in geopolitical tensions or substantial weakening of the rand, the next pricing cycle could begin from a lower base.
That scenario could improve the possibility of some fuel-price relief towards the end of the year.
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