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Fuel price increases predicted for February

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The last few months have brought some welcome fuel price decreases to South African motorists. Sadly, it appears the tide is turning, with the latest mid-month snapshot from the Central Energy Fund showing that small increases are likely for both petrol and diesel in February 2024.

THE LAST few months have brought some welcome fuel price decreases to South African motorists.

Granted, not enough to bring prices to a level resembling sanity, but welcome nonetheless.

Sadly, it appears the tide is turning, with the latest mid-month snapshot from the Central Energy Fund (CEF) showing that small increases are likely for both petrol and diesel in February 2024.

Given how the numbers have swung between over-recovery and under-recovery this month, it’s hard to predict exactly where the pendulum will land at month-end.

The CEF’s current month average points to price hikes of between 7 cents (95 Unleaded) and 11 cents (93 Unleaded) for petrol, with diesel prices set to rise by 3 cents.

However, with the latest daily under-recovery numbers being in the red to the tune of up to 60 cents for petrol and 89 cents for diesel, the price increases are likely to be much higher than those aforementioned predictions, perhaps even as high as 50 cents.

While the exchange rate is currently providing a few cents worth of relief to the fuel price equation, higher international oil prices are driving the predicted increases for the coming month. At the time of writing on January 15, Brent Crude oil was trading around $78 per barrel.

According to Reuters, oil prices have risen in recent days following air and sea strikes by the US and Britain on Houthi rebel targets in Yemen following their attacks on shipping in the Red Sea this month.

Given that this is a critical shipping route, ongoing disruptions could put upward pressure on oil prices in the coming months.

In the short term, though, the effect on South African fuel prices is likely to remain minimal.

Following January’s 76 cent price decrease, a litre of 95 Unleaded currently costs R21.77 at the coast and R22.49 in Gauteng; 93 ULP retails at R22.17. This means petrol now costs about R1 more than it did in January 2023.

Diesel, however, is actually 76 cents per litre cheaper than it was a year ago.

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