Mid-month data from the Central Energy Fund points to petrol and diesel price relief on the cards for November 2023, with lower oil prices currently being the bigger boon for energy users.
Domestic fuel costs are primarily governed by the rand/dollar exchange rate and international oil prices. In South Africa, the fuel price is adjusted on the first Wednesday of every month based on these two factors. The rand weakened at the start of the week on risk aversion linked to the Israel-Hamas war, before gaining sharply on Tuesday and Wednesday on lower U.S. Treasury yields and dovish Fed comments.
Economists have expressed concern that ongoing tensions in the Middle East, mixed with the same local factors that have kept the rand on the back foot for much of the year, will keep the unit range-bound at the current weaker levels.A significant drop in oil prices have been the main contributor to the lower price forecast for fuel – althoughOil prices pushed higher than $95 a barrel in recent weeks, but managed to pull back to $85 a barrel over the period under review by the CEF.