October fuel price shock could add hundreds of rand to South African fill-ups - IOL

Significant fuel price hikes are in the pipeline for October.

Another fuel price shock is looming for South Africans, threatening to push up the cost of getting work and moving goods just weeks after motorists and commuters were hit by steep September increases.

Early October calculations from the Central Energy Fund point to petrol rising by more than R2 a litre, where another increase of as much as R2.05 is currently on the cards for diesel.

The increases would come as taxi commuters are already paying higher fares and road-freight operators contend with diesel accounting for as much as 55% of their operating costs.

But these figures are moving targets. Brent crude traded close to $110 a barrel on Friday after breaching the $100 mark earlier in the week, and further oil-price movements could push the October fuel-price outlook even higher before the final calculations are made later this month.

As things stand, motorists could be paying a record R28.19 for a litre of 95 ULP at the coast and R29.06 in Gauteng. The expected Gauteng wholesale price of R31.60 for 50ppm diesel would also surpass the previous record of R31.38 set in May.

That comes after a painful September increase, when both grades of petrol rose by R1.34 a litre and diesel increased by between R2.94 and R3.15.

For a motorist with a 40-litre petrol tank, the September and projected October increases together would add at least R139 to the cost of a fill-up. For a 60-litre tank, the additional cost would be about R209.

Diesel motorists face an even bigger hit. The combined September and projected October increase for 50ppm diesel is R5.20 a litre, meaning a 40-litre refuel would cost R208 more and a 70-litre fill-up R364 more than it did before the September increase.

Looking back to March, the month before the first major fuel shock, a 40-litre petrol fill-up would be around R350 more expensive by October, while a 60-litre tank would cost roughly R526 more. For 50ppm diesel, the increase would be around R550 for 40 litres and R963 for 70 litres.

And it isn't only private motorists who are feeling the squeeze.

South Africa's minibus-taxi commuters have already been hit by fare increases this year as operators grapple with soaring fuel and other operating costs.

Although fares vary substantially by route and region, taxi associations have announced increases of roughly R3 to R6 on some city routes and R10 to R30 on some long-distance journeys.

Further increases are possible as the September and October fuel-price shocks filter through the industry. IOL has approached SANTACO for further comment.

The impact also extends to commercial transport. Diesel accounts for around 35% to 55% of operating costs for road-freight companies, according to the Road Freight Association.

That means the latest diesel increase could, in isolation, lift the overall operating costs of freight companies by roughly 4% to 6%, depending on the type of operation, routes, vehicles and conditions.

This does not mean freight rates will necessarily rise by the same amount. Operators can absorb some of the additional expense or recover it through fuel-adjustment mechanisms built into transport contracts.

But for households, the bottom line is simple: getting around is becoming more expensive, and the impact is no longer confined to the price displayed on the petrol-pump screen.