REVEALED: Petrol faces October hike as diesel, paraffin show relief signs

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Fuel price forecasts remain tilted toward a petrol hike in October, though a strengthening rand and easing oil prices could soften the blow for motorists.

Latest figures from the Central Energy Fund (CEF) for the second week of September show that petrol is still heading for an under-recovery, while diesel is set for a small over-recovery.

According to the CEF, petrol prices are currently building toward a 13 to 21 cents per litre increase, while diesel could drop by 9 cents per litre. Illuminating paraffin is also projected to fall by 12 cents per litre.

At present projections:

Petrol 93: +11 cents per litre

Petrol 95: +19 cents per litre

Diesel 0.05% (wholesale): –9 cents per litre

Diesel 0.005% (wholesale): –9 cents per litre

Illuminating paraffin: –12 cents per litre

The CEF explained that the mixed trend is largely driven by global oil prices. While refined product prices for petrol remain slightly higher, leading to under-recovery, diesel is benefiting from lower input costs.

Oil has traded within a narrow band of $62–$67 per barrel since August, with Brent crude holding around $66 per barrel. Despite geopolitical disruptions, the commodity has generally weakened in 2025 due to softening demand and increased supply from OPEC+.

Toril Bosoni, head of the oil markets division at the International Energy Agency (IEA), told Bloomberg TV, “On the one hand, we have this surplus emerging in the market. But we’re also seeing the risk to supply.”

The IEA now projects a record oil surplus in 2026 as OPEC+ continues ramping up production alongside rising output from rivals

Citigroup analysts added that the oil market is locked in a “tug-of-war between increasingly bearish fundamentals and heightened geopolitical risks.” The bank maintained its forecast for Brent crude to drop into the low $60s by year-end and into 2026, which could help lower local fuel costs.

In contrast to oil, the rand has strengthened considerably, providing relief to local pricing. The exchange rate has been adding 6–7 cents per litre to over-recoveries across the board.

After weeks of resilience against global shocks—such as the 30% US tariff on South African exports—the rand broke past the R17.50/$ resistance level, trading under R17.40/$. Analysts attribute this to a weaker US dollar, driven by rising unemployment claims and hotter-than-expected inflation data, which have reinforced expectations of a US Federal Reserve rate cut next week.

Like other risk-sensitive currencies, the rand often mirrors global developments, and the prospect of lower US rates has boosted investor sentiment.

The Federal Reserve’s expected move also raises the possibility of a rate cut from the South African Reserve Bank (SARB), though opinions remain divided. Some local economists anticipate at least one 25-basis-point cut before year-end, while others, including Absa’s analysts, argue that no significant policy shift will come before 2027.

Regardless of the divergence in forecasts, analysts agree that the stronger-than-expected rand has provided much-needed relief, offering hope that October’s fuel adjustment may not be as steep as initially projected.

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