Fuel price shock worsens: Petrol and diesel could smash records in October with hikes above R3 - IOL
Petrol and diesel prices are set to reach record highs in October.
Next week's fuel price increases could be worse than originally anticipated, with strong under-recoveries for petrol and diesel worsening the outlook as each day passes.
The latest information from the Central Energy Fund indicates potential petrol price increases of between R3.12 for 95 Unleaded and R2.83 for 93 Unleaded.Β Diesel costs are projected to rise by between R2.73 for 500ppm and R3.13 for 50ppm.
These predicted hikes will see all fuel types breaking new price records, with 95 Unleaded petrol expected to reach around R29.17 at the coast and R30.04 in Gauteng, with 93 Unleaded rising to around R29.75. The wholesale price of 500ppm diesel looks set to reach about R30.96 for those at the beach and R31.84 for inland residents.Β
These projections are significantly higher than they were just two weeks back, when petrol was predicted to rise by around R2.40 and diesel by between R2.04 and R2.40.
These increases come in the wake of Significant price increases in September, when both grades of petrol rose by R1.34 a litre and diesel increased by between R2.94 and R3.15.
The Slate Levy, which compensates oil companies for fluctuations in the preceding month, could add further pressure to fuel prices in October - particularly given the volatility seen in markets during the preceding month.
Steep international oil prices have created significant under-recoveries for both petrol and diesel, with Brent crude having touched a four-month high of $108 per barrel this month following escalating tensions in the Middle East, and more specifically, fresh attacks on Saudi Arabian infrastructure by Iran-based fighters.
Oil markets have been swinging sharply on every twist in the US-Iran standoff, with the Strait of Hormuz remaining the key pressure point. Brent crude initially jumped by more than $4 a barrel on Monday after US President Donald Trump rejected an Iranian proposal that would have paved the way for a seven-day ceasefire and the reopening of the strategic waterway.
Prices later pared some of those gains as Qatar-mediated talks offered a glimmer of hope for a deal, but that optimism has faded again, with Brent trading around $106-$107 a barrel on Tuesday.
The latest update from Iranian Foreign Minister Abbas Araghchi indicates that Tehran is awaiting a formal US response to its proposal, while US officials have indicated that Washington wants progress on the nuclear issue as part of any agreement.
