Despite this strengthening, the rand is yet to recover the R14.50 level which it saw at the end of September, contributing to the under-recovery in fuel.
Mid-month data from the Central Energy Fund (CEF) shows that fuel prices could see significant increases in November on the back of the global energy crisis and a weaker rand.
The data made available by the CEF on 14 October shows an under-recovery in both petrol and diesel prices, pointing to a possible increase of between 95 and 98 cents per litre for petrol and over R1.40 per litre for diesel.
The Central Energy Fund (CEF) has stressed that the daily snapshots are not predictive and do not cover other potential changes like slate levy adjustments or retail margin changes, which the department determines. The Department of Energy makes adjustments based on a review of the whole period. Furthermore, the outlook can change significantly before month-end. Prices are affected by two main components – the rand/dollar exchange rate and charges to international petroleum product costs, primarily driven by oil prices.
At mid-October, a weaker ZAR/USD exchange rate is contributing to an under-recovery of around 23 cents per litre for all fuel types, with changes to international product prices adding to the pain. Differences in price and refining costs for petrol and diesel create a divergent path on pricing, with diesel seeing an over-recovery of R1.17 per litre in product price changes, while petrol shows an over-recovery of 72 to 74 cents per litre.
Despite this strengthening, the rand is yet to recover the R14.50 level which it saw at the end of September, contributing to the under-recovery in fuel. Credit: Statenewsghana.com