Fuel prices in South Africa are expected to increase once more in September, with WesBank pointing towards the rise in international oil prices and the rand/US dollar as the main drivers behind this push.
“As September approaches, the convergence of oil prices and the rand/dollar exchange rate assumes paramount significance in shaping local fuel prices,” said the finance house.
“With both factors aligned against motorists, the impending month threatens to bring about heightened challenges at the fuel pumps.”
Daily fuel-price data published by the Central Energy Fund (CEF) indicates that, as of 22 August, petrol prices are set to go up by approximately R1.60 per litre on the first Wednesday of September, while diesel prices could see a maximum increase of R2.74 per litre.
The depreciation of the local currency from an average of around R17.80/dollar at the start of August to R18.70/dollar on the 22nd has contributed to these anticipated hikes by between 29 and 33 cents per litre, depending on the grade.
Weakness in the rand is attributed to factors such as South Africa’s deteriorating infrastructure, load-shedding, and major outflows of funds from the country’s fiscus in June/July, as well as threats of sanctions from the United States, strength in the US dollar, and a risk-averse sentiment from global investors, according to TreasuryOne.
Similarly, oil prices reached a peak of over $87.50/barrel in August, the highest they have been since April, following an output cut of one million barrels per day from Saudi Arabia.
This movement has materialised in an under-recovery of between R1.26 and R1.30/litre for petrol prices in South Africa, and between R2.37 and R2.42/litre for diesel.
The final price changes that will come into effect in September must still be announced by the Department of Energy, with oil prices and the rand/US dollar exchange rate being the largest determinants of these alterations.
Fuel-saving tips
With large price hikes on the cards for next month, WesBank has provided useful insights and strategies for cash-strapped motorists that want to optimise their fuel usage:
- Plan ahead – Utilise navigation apps and listen to traffic reports to find the best routes to avoid traffic
- Drive smoothly – Avoid aggressive driving habits such as rapid acceleration, speeding, and hard braking
- Remove unnecessary items from your car – Less weight means less energy required for acceleration
- Regular service/maintenance – Regularly servicing a vehicle ensures it operates efficiently and consumes less fuel
- Maintain a constant speed and avoid excessive speeding – Driving at slightly lower speeds can improve fuel efficiency
- Avoid stop-start driving – Maintain momentum by planning ahead and flowing with traffic to minimise unnecessary braking
- Check wheel alignment and tyre pressure – Proper wheel alignment and the correct tyre pressure reduces friction and thus fuel usage
- Fuel reward programmes – Reward programmes have the potential to offer valuable savings and benefits, so it’s worth checking if your bank or insurer provides them
- Optimise Air Conditioning – Use air conditioning sparingly at low speeds. At speeds of 80km/h or higher, using air conditioning is more fuel-efficient than open windows due to reduced wind resistance
- Keep a safe following distance – By looking closely at what pedestrians and other cars are doing, and anticipating what might happen next, you can keep your speed as steady as possible and use less fuel
“By following these practical tips, drivers can significantly reduce their fuel consumption and lower their expenses,” concludes WesBank.
Keyword: Big petrol price hikes predicted for South Africa in September – Here’s why