South African motorists will be hit with significant petrol and diesel price increases from Wednesday, March 6.
Late month unaudited data from the Central Energy Fund is pointing to increases of around R1.20 per litre for 95 Unleaded petrol and R1.16 for 93 Unleaded, while diesel is looking set to rise by between R1.07 (500ppm) and R1.21 (50ppm).
This should push the price of 95 Unleaded to around R23.72 in the coastal regions and R24.44 in Gauteng, where 93 Unleaded will rise to about R24.08.
These increases will bring petrol prices uncomfortably close to the highs of October 2023, when coastal 95 Unleaded cost R24.96, and July 2022, when it spiked at an all-time high R26.09.
The wholesale cost of 500ppm diesel is expected to rise to R21.93 at the coast and R22.64 in the inland areas in March.
However, these predictions are based on unaudited data and factors such as the Slate Levy could still push prices in either direction. The official petrol prices for March will be announced by the Department of Energy early next week.
The upcoming increases are due to a combination of rand weakness and higher international oil prices. As it stood at month-end, the rand has contributed 17 cents to the month’s under-recovery while oil has been in the red to the tune of R1.03.
Brent Crude oil, which has mostly traded in the range between $82 and $84 US Dollars per barrel in February, up from its average of $80 the previous month, has been a victim of both production cuts and Middle Eastern conflict.
Senior trader Dennis Kissler of BOK Financial told Reuters that tighter oil supplies would be a reality as we head deeper into 2024.
"OPEC is looking for mid-$80s, maybe around $85 a barrel on Brent. If we stay below that, they will curtail production all the way to the year end," Kissler said.
Shipping attacks in the Red Sea remain a concern and Yemen’s Houthi has vowed to continue these until Israel’s aggression against Gaza ends.