As South Africa braces for possible fuel price hikes in February 2025, the latest projections highlight a significant increase in fuel costs. This adjustment is largely driven by two main factors: rising international oil prices and a weakened rand. Here’s an overview of what’s happening and how it might affect consumers.
Fuel Price Projection: What the CEF Data Shows
Recent data from the Central Energy Fund (CEF) reveals concerning under-recoveries across various fuel types. As of mid-January 2025, the figures suggest that prices will likely rise substantially in February. The under-recoveries per liter are as follows:
- Petrol 95 ULP: R1.41 under-recovery
- Petrol 93 ULP: R1.50 under-recovery
- Diesel 0.05% sulphur: R1.92 under-recovery
- Diesel 0.005% sulphur: R1.83 under-recovery
- Illuminating paraffin: R1.71 under-recovery
These figures indicate that petrol prices may increase by more than R1.40 per liter, with diesel prices potentially surpassing R1.90 per liter.
Key Causes for the Projected Increase
Two primary factors contribute to the significant price increases in February:
1. Rise in International Oil Prices
As of mid-January 2025, the international oil price (Brent crude) is hovering at $80 per barrel, showing a steady increase in recent weeks. Concerns about supply disruptions, along with geopolitical tensions in key oil-producing regions, have led to a rise in global oil prices. This surge is directly impacting local fuel costs.
2. Depreciated Rand
The South African rand has weakened significantly against the US dollar, with the dollar appreciating further as of January 14, 2025. This depreciation makes it more expensive to import fuel, which is purchased in dollars, and subsequently drives up local fuel prices. The weaker rand, coupled with an increased oil price, is contributing to the expected price hike.
Impact on Consumers: What to Expect
The upcoming fuel price increase will directly impact South African consumers, particularly motorists and industries reliant on fuel for transportation.
Motorists
Fueling up your vehicle will likely become more expensive. For example, if you have a 45-liter petrol tank, filling it with Petrol 95 will cost you an additional R63.45. If your vehicle runs on Diesel 0.05% sulphur, expect to pay an extra R86.40 for a full tank.
Goods and Services
The rise in diesel costs will also affect the transportation of goods, as many freight vehicles use diesel. This increase in transportation costs will likely lead to higher prices for food, raw materials, and other goods, ultimately affecting everyday consumer expenses.
Official Announcement and Timeline
The Department of Mineral Resources and Energy (DMRE) is expected to issue an official notice detailing the final adjustments to fuel prices towards the end of January 2025. These price changes will take effect from midnight on Tuesday, February 4, 2025. Motorists are advised to stay updated by following official communications from the DMRE.
Preparing for the Price Hike
To mitigate the financial impact of the upcoming price increase, South Africans may want to consider a few strategies:
- Cut Back on Unnecessary Driving: By driving less and adopting more fuel-efficient driving habits, you can reduce your overall fuel consumption.
- Carpooling: Share rides with friends or colleagues to reduce the number of vehicles on the road, thus cutting fuel costs.
- Budget for Higher Fuel Prices: Adjust your monthly budget to accommodate the anticipated increase in fuel costs.
Conclusion
The anticipated fuel price hikes in February 2025 are a direct result of rising global oil prices and a weakened rand. Consumers can expect significant increases at the pump, which will also influence the cost of goods and services. While the official announcement is pending, it’s advisable for South Africans to start preparing for the inevitable adjustments and to explore ways to reduce fuel consumption.
