The October fuel price forecast offered by the Central Energy Fund (CEF) predicts that both grades of petrol will drop by R1.97 per litre, however, diesel will go up by at least 54 cents. Paraffin is predicted to increase by 2 cents.

These figures are subject to change before implementation as they are based on CEF’s latest information at their disposal.

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September saw the petrol price decreased by R2.04 per litre for both grades after motorists have been experiencing pressing price hikes in the previous months.

An economist from the North West University (NWU), Waldo Krugell, previously explained the factors which play a role in determining the increase or decrease of the petrol price in the country. The main factor to have made the petrol price drop was the decline in international oil prices. 

"The two main drivers are the price of crude oil and the rand/dollar exchange rate. The price of crude oil decreased in August but unfortunately the rand/dollar exchange rate has also been down in August, meaning our savings could have been higher had the rand been stronger against the dollar.”

Although the rand/dollar exchange rate was down in August, it still favoured the petrol price dropping, which is good news for South Africans. “For ordinary households, it means your fuel spending is going to be less and you can use the money for other necessities. It is also a good thing for inflation - if there is an increase in transport costs, it makes other products more expensive. That pressure has now been lifted,” explained Krugell.

He also stated that a decrease in the fuel price usually means a price decrease for other products, however, it takes time to get to that point. When transport costs are less, eventually the costs of goods and services will also decrease.

ALSO READ: Fuel price drop a relief

At the time, the diesel price also decreased with the petrol price by 56 cents. 

Economist and senior lecturer at the University of the Free State (UFS), Arno van Niekerk, has also shared the same sentiments as Krugell  - that the petrol price drop will go a long way as far as people’s budgets are concerned.

"One of the things that will be significantly impacted is inflation, as the fuel price does not only impact motorists, it also has a knock-on effect on the entire economy. It is not just motorists paying more, it is also the impact of cost on production, from farming to transport to different sectors in the economy.”

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