February 2024 fuel price outlook is getting bleaker by the day

Petrol and diesel prices are headed upward. File picture: David Ritchie / Independent Newspapers

Petrol and diesel prices are headed upward. File picture: David Ritchie / Independent Newspapers

Published Jan 24, 2024


South African motorists will almost certainly be hit with higher fuel prices in February, but the extent of these increases remains up in the air.

The latest data from the Central Energy Fund shows an underrecovery in the price of both petrol and diesel.

However, the volatility of the South African rand and international oil prices this month has made it harder than usual to make an accurate fuel price prediction for next month.

But take a deep breath, because the outlook is getting bleaker by the day.

With the latest daily data being up to R1.68 in the red, the month’s “average-so-far” that usually allows us to predict the following month’s fuel price with reasonable accuracy is now a fast-moving target. So you might want to ignore what you’ve read on some other news websites that blindly regurgitate that average at any given time of the month.

This month's average under-recovery currently sits at 43 cents for 95 Unleaded petrol and 40 cents for 50 ppm diesel. But it’s been shifting upwards by about six cents per day, meaning that petrol and diesel could both shift towards the 80 cent mark if current rand and oil price trends continue until the cut-off late next week.

The official fuel price adjustments will take effect on Wednesday, February 7.

Of course, much can still happen between now and then, particularly given the current volatility in the Middle East, and the Slate Levy, which compensates fuel companies for price fluctuations, could also have a bearing on the final price structure.

After averaging just over $77 per barrel in December 2023, Brent Crude oil prices have been hovering close to $80 in January, largely due to shipping disruptions caused by attacks in the Suez Canal and the recent announcement of Chinese economic stimulus packages, improving economic sentiment.

That said, rating agency Fitch isn’t expecting oil prices to move too much higher than present levels, according to Reuters.

"Heightened geopolitical risk, including the recent shipping disruptions, will maintain the oil price premium," Fitch stated.

"However, without material disruptions to actual oil production or a wider escalation of attacks, we do not expect a strong upside to our $80 a barrel Brent price assumption for 2024, as there is material OPEC+ spare capacity."

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