Data from the Central Energy Fund (CEF) indicates that fuel prices in South Africa could drop by a significant margin come the first Wednesday of September.
The unaudited mid-month figures show a potential reduction of 66c per litre for petrol and as much as 78c per litre for diesel.
Motorists can thank lower average international oil prices during August for these expected adjustments.
Between the 2nd and 13th of August, Brent Crude oil prices traded between a low of $76.30 per barrel and a high of $82.30 per barrel.
In comparison, the month prior saw the black gold peak at a high of $87.43 per barrel and reach a low of $76.81 per barrel.
The lower average costs over the past two weeks have resulted in reduced international petroleum prices, resulting in an over-recovery in domestic fuel prices of between 68-73c per litre for petrol and 62-85c per litre for diesel.
Over the same period, the average rand/US dollar exchange rate was relatively stable, but slightly higher than the month prior.
On 2 August, the currency pair traded at approximately R18.19 per dollar, soaring to R18.40 per dollar by the 6th and dropping back down to around R18.35 per dollar by the 13th.
This led to an under-recovery in local fuel prices of between 6-7c per litre for both petrol and diesel.
Based on these inputs, fuel prices in South Africa next month are expected to be adjusted as follows, as per the CEF:
- Petrol 93 – Decrease of 61c a litre
- Petrol 95 – Decrease of 66c a litre
- Diesel 0.05% – Decrease of 55c a litre
- Diesel 0.005% – Decrease of 78c a litre
It must be noted that these predictions are not the official changes that will be made by the Department of Energy in September, 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.
Good news for the rest of 2024
The current downtrend in fuel prices is expected to persist until the early parts of 2025, which could see petrol prices drop below R20 per litre from their current levels of R23.11 per litre, as per FNB Senior Economist Koketso Mano.
“Daily indications from the Central Energy Fund show an average over-recovery, north of 50c, for both petrol and diesel over the first half of this month, up to the 13th of August,” Mano told TopAuto.
“We currently project a continued downward trend, with petrol prices potentially falling below R20 per litre in the early part of 2025.”
Conversely, the economist said that diesel prices may move in the opposite direction of their cleaner counterpart.
“Wholesale diesel prices, which are already at lower levels, should experience more upward pressure – especially as global economic activity starts to recover from the cost-of-living crisis,” said Mano.
These anticipated trends are based on weaker-than-expected economic indicators out of the United States, lacklustre oil demand from China, and slowing global inflation.
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