15 September 2023
By: Alani Janeke
The petrol price could rise by more than R1/litre in October, and diesel could go up by more than R2.
Dawie Maree, head of information and marketing at FNB Agriculture, says data on 13 September suggest the price of a litre of 93 octane petrol could increase by R1.15, and 95 octane by R1.21.
A litre of 50ppm diesel could be R1.94 more expensive, and a litre of 500ppm diesel could cost R2.06 more.
“If the rand significantly strengthens and the international oil price significantly weakens from its level of around $89 and $90 per barrel, things could change,” he says.
“But with stage 7 load-shedding looming and the pressure on the economy and the rand in general, I don’t see that happening.
“This outlook is not good news for agriculture, especially for summer grain producers whose planting season begins in October in the eastern parts of the summer grain region.
“At the same time, producers in the western summer grain areas need to start preparing for planting, and farmers in the winter grain region are heading into straw harvesting.”
Interest rates
Regarding the economy in general, Maree says higher fuel prices could increase food prices and drive inflation higher. More expensive fuel means it also becomes increasingly costly for businesses to operate alternative energy sources such as generators during extended load-shedding.
On Wednesday, Eskom announced the possibility of stage 7 load-shedding, and rolling power cuts have occurred more frequently over the past few weeks.
“The increased costs and a rise in inflation could mean the Reserve Bank may need to keep interest rates at their current levels or even raise them,” says Maree.
“Based on last month’s consumer price inflation of 4.7%, the expectation was that interest rates could start declining by the middle of 2024. However, if the trend of fuel prices and load-shedding continues like this, we might only see that decline at the end of 2024.”
The Reserve Bank monetary policy committee will meet from September 19-21 to discuss interest rates.
