Record petrol prices predicted for South Africa in October

South African motorists could face record petrol prices from October, as the continuing war in the Middle East has pushed oil prices to hover near the $100-a-barrel mark for the first time since July, IOL reported.

The latest daily snapshot from the Central Energy Fund (CEF) is currently pointing to petrol price increases in the region of R2.00 for 95 Unleaded and R1.88 for 93 Unleaded.

This would push the price of 95 ULP to R28.05 a litre at the coast and R28.92 inland in Gauteng, surpassing June's record highs of R27.19 and R28.05 respectively.

Diesel is also set for a significant increase, with the data pointing to hikes of between R1.50 for 500ppm and R1.80 for 50ppm. This would push the price of 50ppm diesel to R30.29 a litre at the coast and R31.85 inland, close to its record highs of R30.62 and R31.38, set earlier this year.

The projections carry a caveat, as they are based on early-month data that remains a moving target, with much still able to change in the markets before the end of the month.

However, with no sign of the Middle East war de-escalating and continuing uncertainty around the Strait of Hormuz oil route, the risk is currently skewed toward higher oil prices for the foreseeable future.

October's projected increases follow steep hikes in September, when petrol rose by R1.34 a litre and diesel by between R2.94 and R3.15.

Higher fuel prices can push up inflation and squeeze household spending, as transport, food and other goods become more expensive when fuel costs feed through supply chains, leaving motorists with less disposable income to spend elsewhere.

That, in turn, can weigh on economic growth. The South African Reserve Bank has warned that higher fuel prices can raise inflation while weakening consumption and growth.

Official confirmation of the October fuel price adjustment is expected from the Department of Mineral and Petroleum Resources on 7 October, when the CEF's projections will be finalised against month-end data.