According to the latest data from the Central Energy Fund (CEF), South African motorists can look forward to sizeable price cuts for petrol and diesel next month.
This is chiefly thanks to declining oil prices amid geopolitical tensions and fears over a global economic slowdown.
Additionally, the surprising strength of the rand against the dollar this past month has helped ensure that the decline in oil prices converts to price cuts for local fuel.
The CEF’s latest data reports show the following:
- Petrol 93 – decrease of 62 cents per litre
- Petrol 95 – decrease of 58 cents per litre
- Diesel 0.05% – decrease of 34 cents per litre
- Diesel 0.005% – decrease of 33 cents per litre
These decreases will come as a pleasant surprise for South African motorists.
Price drop causes
The main reason for the declines has been a sharp drop in oil prices, with Brent crude dropping by nearly 10% over the last month.
This considerable drop results from rising supply and fears of declining demand as major global economies slow down.
China, for instance, reported its slowest rate of quarterly economic growth in a year this month; this has had a large impact since the country is a key player in the oil industry, being the single largest importer of fuel.
Oil production is also seeing a steady rise as the Organisation for Petroleum Exporting Countries (OPEC) has removed most of its production caps.
By removing these caps, OPEC has added millions of barrels to the global oil supply, and the number of oil tankers at sea has risen to a record high this month.
The International Energy Agency has also projected a record oil surplus for next year.
Thanks to this, oil prices have been steadily declining for three consecutive months.
The rand has also remained relatively flat against the dollar over the past month despite the currency being extremely volatile.
This is notable as the rand’s value is largely determined by external factors outside of South Africa’s control, including interest rate cuts from the US Federal Reserve, Chinese policy, and commodity prices.
For 2025, the rand has had a strong year, with it strengthening against the dollar by 8% – this is mainly due to the dollar weakening due to global events.
Should the dollar continue to weaken, the advantageous position of the rand could continue, which will have a direct, beneficial impact on fuel prices for South African motorists.
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