Petrol price cut on the cards Wednesday, but diesel may be hiked

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The latest information from the Central Energy Fund shows that petrol prices may be cut on Wednesday. However, diesel is on track for a small price hike.

Based on the latest data, the price of 95 unleaded petrol is expected to fall by around R1.02 a litre. At current levels, the 95 petrol price in Johannesburg could move to below R22.40 a litre on Wednesday - the lowest since May this year.

The price of 93 petrol could drop by around 90c a litre. However, diesel price is currently on track for a hike of between 10c to 15c a litre.

The fuel prices are usually adjusted on the first Wednesday of a month and determined by the price of oil and the rand-dollar exchange rate. 

The rand has taken a big hit over the past month - weakening from R17.17/$ at the start of September, to above R18 amid global market turmoil and record load shedding in South Africa. But fortunately for motorists, the oil price has slumped to its lowest level since January amid concern about energy demand as steep interest rate hikes weigh on global economic growth.

On Friday, Brent crude oil was trading at around $85 a barrel - after hitting a high of $123following Russia's invasion of Ukraine in February.

But diesel prices are remaining stickier than petrol because of a squeeze on diesel supplies worldwide.

READ | Oil and trouble: Why diesel prices aren't coming down that much

This is due in part because Europe - which produces more petrol than it needs - is an importer of diesel, much of it from Russia.

The invasion of Ukraine and subsequent sanctions stopped the flows. This has squeezed prices higher as European countries scramble to find alternative diesel sources.

In South Africa, continuing problems with the railways have increased truck deliveries - fuelling the local demand for diesel. According to 2019 data from the Department of Energy, South Africa consumed 12.9 billion litres of diesel and 10.77 billion litres of petrol.

A lack of diesel supplies has contributed to load shedding, as it hobbled Eskom's efforts to feed its emergency generators.

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