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Petrol price warnings for October.

The hefty pump price hike that took effect this week is still hitting South African drivers and petrol consumers, but September is off to a rocky start with October's prospects looking dim.

The Central Energy Fund's (CEF) daily review of balances reveals that, despite this week's increase in fuel costs, the new month is beginning in essentially the same situation as last month.

For petrol, the group is now displaying a significant under-recovery between R1.61 and R1.65, and for diesel, an even greater under-recovery between R2.69 and R2.87.

Although the month has only just begun and a lot may happen over the next few weeks, market circumstances would have to alter drastically for the rand and oil prices for these under-recoveries to transform into a positive for drivers.

Consumers typically experience under-recovery when they pay less than they ought to for a product on a given day, whereas over-recovery is the opposite.

The monthly total of the daily over- or under-recovery values is then added to the ultimate surplus or shortage amount, which is subsequently reflected in the pump price on the first Wednesday of the following month.

The rand and the price of oil globally are once more putting pressure on pricing, according to the CEF's data.

The mismatch will continue pushing up petrol prices by about 25 cents per litre if the rand does not rise and the weakness lasts for the rest of the month.

Meanwhile, oil costs have risen even further since August and are now responsible for an R1.40 per litre under-recovery for petrol and an R2.40-R2.60 per litre under-recovery for diesel.

If there is any chance of lower petrol and diesel prices in October, both the rand and the price of oil globally would have to drastically fluctuate in the motorists' favor.


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