Significant Petrol and diesel price increases on the cards for February as oil prices surge

February’s fuel price hikes are likely to be bigger than expected thanks to recent developments on the oil price and local currency front.

Mid-month data released by the Central Energy Fund (CEF) shows significant under-recoveries for both petrol and diesel, and these are growing by the day as the price of Brent Crude oil nears four-month highs.

The CEF’s latest daily snapshot, from January 13, points towards increases of 75 cents per litre for 95 Unleaded petrol and 81 cents for 93 Unleaded, while diesel is looking set to go up by between 87 cents (50ppm) and 89 cents (500ppm).

But with the price deficits growing by the day, the eventual increases could easily surpass R1 per litre if current trends persist.

95 Unleaded currently costs R20.80 at the coast and R21.59 inland, where 93 ULP is pegged at R21.34. An increase in the region of R1 will erode much of the progress seen in the second half of 2024. The coastal price of 95 ULP peaked at R24.70 in May last year, while its lowest point was R20.26 in October.

The current under-recovery, which will lead to next month’s increase, is being led by the combination of a weak rand and surging international oil prices.

The price of Brent Crude oil has risen by almost 10% since the start of 2025, testing four-month highs and surpassing the US $80 (R1,520) mark on Tuesday morning. This is far above the December average of $72.78.

The market is being driven upward by US sanctions on Russian crude oil, which could take up to 800,000 barrels per day off the market, Reuters reports.

"Headlines surrounding Russia oil sanctions have been the dominant driver for oil prices over the past week, and combined with resilient US economic data, the tighter supply-demand dynamics have been seeing some momentum," IG market strategist Yeap Jun Rong said.

The rand, which averaged R18.11 to the US dollar in last month, has also been trading weaker in January, surpassing the $19 mark late last week.

IOL