Petrol down, diesel up for November

Fuel price outlook 31 October

Fuel prices have moderated during October, with the prospect of some relief for petrol users, although users of diesel and illuminating paraffin will have to cough up more according to the unaudited month-end fuel price data released by the Central Energy Fund.

The exchange rate started the month badly but has since levelled out. The Rand's modest gains against the US dollar have helped cushion the impact of rises in the landed price of fuel in the case of diesel and illuminating paraffin. Both diesel and illuminating paraffin experienced substantial jumps in their landed prices, whereas the landed price of petrol remained almost unchanged in October.

As a result, we expect the petrol price to drop by about 16 cents a litre, and unfortunately, diesel and illuminating paraffin will both increase by about 30 cents a litre.

We do need to note that international petroleum prices have shown modest declines in the past month, which could be seen as 'a cause for optimism'. If the Rand maintains its current trajectory of relative stability, this could augur well for the fuel prices as the Christmas season approaches. However, we caution against premature celebration.

2018 has been one of the most tumultuous years in history for South African fuel users, and the economy is still fragile and easily spooked.