Motorists can expect a petrol price hike in May, according to the latest data from the Central Energy Fund.
Mid-month data on changes to fuel prices show an under-recovery of around 55 cents per litre for petrol, while diesel shows an over-recovery of around 5 cents.
Should current conditions persist to the end of the month, this could see the pump price of 95 grade petrol climb to R16.68 per litre, and 93 grade push over R16 to R16.50.
The key driver behind the expected hike is the rising cost of international petroleum which South Africa imports, contributing to a 68 cents per litre increase in petrol prices, but only 8 cents per litre for diesel.
The USD/ZAR exchange rate, meanwhile, has worked in South Africa’s favour so far in April, contributing a 13 cents per litre decrease in fuel prices.
The rand’s recovery over the past week has been largely driven by external factors, with local indicators shaky ahead of the 2019 elections.
According to Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions, the rand is trading in a very tight range, with the market’s risk appetite being driven by an upbeat start to the US earnings season, with positive signals from the Chinese economy also assisting.
International petroleum prices meanwhile, are closely tied to international oil prices, which have climbed steadily since the start of the year.
Having dipped to $50 a barrel in November and December 2018 – the cost of Brent crude oil has climbed above the $70 mark, with some analysts predicting $80 per barrel in the coming months, driven by strong demand from China.
Here is what you can could be paying in May:
|Fuel||April Official||May Expected|
|0.05% Diesel (wholesale)||R14.88||R14.83|