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Fuel prices are currently on track for increases in the first week of November, but a slumping oil price may yet help to trim these hikes.

The latest estimate from the Central Energy Fund (CEF) shows that the price of 95 unleaded petrol is due for a hike of almost 17c a litre, while wholesale diesel may be increased by around 16c.

But final prices will only be fixed at the end of October and adjusted on the first Wednesday of November.

READ | Tax relief? Mantashe says petrol, diesel should cost R14 a litre

Local fuel prices are largely determined by the Brent oil price, and the rand/dollar exchange rate, as oil is priced in the US currency.

Oil prices have been climbing this month amid concern about disruptions to output in the Middle East, which holds about a third of global oil supply, Bloomberg reported. Escalating military tensions between Israel and Iran have pushed Brent from below $74 a barrel at the start of October to close to $81 recently.

However, on Tuesday, Brent slumped by more than 4% back to $74.25 amid reports that the Israeli government assured the US that it would not strike Iranian oil targets. On Wednesday morning, it was trading closer to $75.

This was also due in part to renewed concerns about the weak demand for oil, which has weighed on prices in recent months. Both the Organisation of the Petroleum Exporting Countries and the International Energy Agency recently lowered their global demand forecasts, mostly due to economic weakness in China.

READ | Fuel price shocker: Some areas to miss out on large cuts this week as port woes bite

Meanwhile, the rand slipped from R17.28 at the start of the month, to trade at R17.58 on Wednesday morning as traders downgraded their expectations for US interest rate cuts. (Smaller cuts mean that the dollar will still offer an attractive interest rate compared to other, riskier currencies, including the rand.)

At the start of October, petrol and diesel prices were cut by more than R1 a litre, lowering fuel prices to levels last seen before Russia invaded Ukraine in February 2022.

The prices of 95 unleaded petrol reached R21.05 a litre in Gauteng and R20.26 on the coast, while wholesale diesel prices were lowered to R18.45 in Gauteng and to R17.66 on the coast.

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