Brent Retreat Fails to Shield South Africans from Fuel Price Increases

The Brent crude oil price has retreated from its recent highs, but this does not guarantee that South Africans will be shielded from another round of fuel-price increases at the start of October. According to Dr Lerato Ntuli, economist at Anchor Capital, Brent crude still remains above $100 per barrel, trading at $101.08 per barrel on Monday.

The government has no immediate intervention planned to cushion households and businesses from rising fuel costs, Mineral and Energy Minister Gwede Mantashe confirmed recently in Parliament. In the global oil market, there have been signs of recovering Middle East supply, with Saudi exports rebounding and Strait of Hormuz flows at a six-month high.

The Basic Fuel Price (BFP) is calculated daily by the Central Energy Fund (CEF), but the monthly fuel adjustment lags international price movements by around a month. This means that most of the October pricing has already been determined, limiting the extent to which the recent decline in oil prices can affect October fuel prices.