Fuel prices are looking to come down across the board this Wednesday, 5 June 2024.
Current projections from the Central Energy Fund (CEF) show a potential decrease in petrol costs of R1.06 litre being on the cards, and a drop in diesel rates of as much as R1.00 per litre.
During May, both the international prices of refined petroleum products as well as the rand/US dollar exchange rather performed in favour of local fuel rates.
Oil prices dropped from around US$89.50/barrel at the end of April to US$81.86/barrel by the end of May, contributing to an over-recovery in domestic fuel costs of between 60-76c/litre, depending on the type of propellant.
Similarly, the rand swapped hands with the US dollar at just under R19.00/dollar in the final week of April, gaining to R18.69/dollar by 30 May.
This slashed another 30-31c/litre from the prices we could see at the pumps this month.
According to these inputs, fuel prices in South Africa on Wednesday are expected to be adjusted as follows:
- Petrol 93 – Decrease of R1.06 a litre
- Petrol 95 – Decrease of R1.06 a litre
- Diesel 0.05% – Decrease of R1.00 a litre
- Diesel 0.005% – Decrease of 91c a litre
It must be noted that these predictions are not the official changes that will be made by the Department of Energy for June, which may be higher or lower as they also take into account any potential changes in the Slate Levy, taxes, transport costs, or wholesale and retail margins.
Elevated oil prices to remain
With oil costs presently sitting at a four-month low, the OPEC+ group of oil-producing nations decided to extend its voluntary production cuts in an effort to stabilise the price of the commodity.
In its bi-annual meeting this past Sunday, the group decided to “extend the additional voluntary cuts of 1.65 million barrels per day that were announced in April 2023, until the end of December 2025.”
Moreover, the 12-member cartel and its 10 allies confirmed they will continue their additional voluntary cuts of 2.2 million barrels per day, which was announced in November 2023, until the end of September 2024, then the production cut will be gradually phased out on a monthly basis for another year.
However, the latter decision can be reversed at any time should market conditions not play out the way the OPEC+ cartel expects it to, it said.
Analysts believe that this will see current oil price levels remain until deep into the second half of 2024, subsequently keeping international petroleum product costs stable for the remainder of the year, the Wall Street Journal reports.
Join the discussion