South African motorists are set to face sharp fuel price hikes when new adjustments take effect on February 5, 2025. The latest figures from the Central Energy Fund indicate significant under-recoveries for both petrol and diesel, signaling steep increases in the cost of fuel.
The expected changes could see 95 Unleaded petrol rising by 88 cents per liter, bringing the price to around R21.68 at the coast and R22.47 inland. Similarly, 93 Unleaded petrol is projected to increase by 95 cents, landing at approximately R22.54 per liter. Diesel prices are also set for significant increases, with hikes of between R1.08 and R1.11 for 50ppm and 500ppm diesel, respectively.
However, these figures may be on the conservative side. Current data suggests that the situation could worsen by the end of the month. If trends continue, petrol prices could soar by as much as R1 or more. The ongoing challenges stem from a combination of rising global oil prices and a weaker South African rand, both of which have significantly worsened the outlook for February fuel prices.
Oil prices have been on the rise throughout January. After averaging $72.78 per barrel in December 2024, the price of Brent crude oil surged to $82 by mid-January, settling at $79.92 on January 21. This price increase is attributed to various factors, including stricter US sanctions on Iran and Russia, as well as heightened seasonal demand driven by cold weather in the Northern Hemisphere. These global dynamics are continuing to place pressure on South Africa’s fuel prices.
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In addition to higher oil prices, the South African rand has weakened significantly. Having averaged R18.11 during the previous fuel review period, the rand briefly surpassed the R19 mark earlier this month before recovering slightly to R18.60. While the recovery offers some relief, it remains insufficient to counteract the rising fuel prices.
Looking ahead, the outlook remains uncertain. Despite predictions from the World Bank that oil prices would stabilize around $73 in 2025, ongoing geopolitical developments, including potential impacts from a new US presidential administration, could further influence global oil prices.
For now, South African motorists should prepare for a sharp increase in fuel prices in February, which will likely add further strain to household budgets already impacted by inflation and the broader cost of living. With global and local factors showing no immediate signs of easing, these price hikes could be just the beginning of a difficult year for fuel consumers in South Africa.
