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Johannesburg - Petrol prices in South Africa could be hiked at the beginning of September by about 30 cents per litre.
The country's daily unleaded petrol price has been in an under-recovery position since the start of August, according to data from the Central Energy Fund supplied on Wednesday morning.
South African petrol pump prices are fixed once a month. An under-recovery means consumers pay less for petrol than the actual price, which takes into account the continuously moving rand/dollar exchange rate and international product prices.
The Gauteng pump price has been 769c/litre of unleaded 95 since August 5.
Since that date, consumers have paid on average 40c/litre less at the pump than the actual cost of petrol.
At this point in the month, the department of minerals and energy could increase the unleaded 95 price per litre by as much as 40c. However, petrol's under-recovery could ease somewhat later in August.
On Tuesday, South Africans underpaid only 26c for a litre of unleaded 95.
"It looks like they will hike, unless we have a huge rally in the rand in the next few days, which is not likely," said Jean Francois Mercier, chief economist at Citi SA.
He added that the rand and oil prices are seen as relatively range bound, without any drastic moves, for the next week or so.
"I don't think we will see a hike as big as 40c. An increase of about 20c or 30c/litre is probable," he said.
The present average under-recovery of diesel with a sulphur content of 0.05% is 37c/litre.
- Fin24.com