Petrol price October 2019: Saudi attack will be felt in local fuel prices

Petrol price October 2019

The petrol price picture for October 2019 is not looking good. According to the latest petrol price prediction for October 2019 by the Automotive Association of South Africa, local motorists should brace for impact in petrol and diesel prices after an attack on a major Saudi oil processing plant.

This comes after hefty petrol and diesel price increases in September.

Drone strikes on Saudi Arabia’s Abqaiq oil refinery have wrought chaos on world oil markets and made the forecasting of the oil price more difficult, the AA said.

The association was commenting on unaudited mid-month fuel price data released by the Central Energy Fund.

“The refinery strike was a game-changer for the way oil price stability is viewed. At a single stroke, five to seven percent of the world’s oil output has been wiped from the board, leading oil prices to surge disproportionately,” it added.

The effect of the attacks has begun to feed into the South African fuel price picture. 

Expected Petrol and Diesel prices for October 2019

“Diesel, already set for an increase by last Friday, has swung further into the red, with an increase of 13 cents a litre now forecast, the AA said.

“Illuminating paraffin has followed suit, with an eight cent rise on the cards. All grades of petrol were showing a decrease on Friday, but this has narrowed, from eleven to five cents in the case of 95 octane, and 25 to 20 cents for 93 octane.”

The AA said that because of the volatility of the factors which influence the local fuel price, movements are likely and the outlook will change before month-end.

“The US President has authorised the release of oil from that country’s Strategic Petroleum Reserve. This should calm some oil price nerves, but the potential for copycat attacks on other oil installations now that their vulnerability is clear remains a concern,” says the AA. 

The Association notes that South Africa’s heavy reliance on petroleum imports is worrying. In an era where many millions of barrels of production capacity could be removed in an instant, the country cannot ignore the risk of fuel shortages or crippling price increases which are disconnected from normal supply-and-demand cycles.

“We believe government should review short-term risk mitigations, including increased biofuel production, electric vehicles, and better public transport. Given the recent developments, these mitigations should now become urgent priorities for government,” the AA concluded.

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