According to mid-month fuel price data published by the Central Energy Fund (CEF), South Africans can expect a welcome drop in prices for both petrol and diesel come June.
The former fuel type is anticipated to fall by a maximum of R1.13 per litre, whereas the latter could see a decrease in the region of R1.37 per litre.
These expected reductions come after local petrol prices topped R23 per litre in May for the first time in 2023.
According to the CEF’s latest numbers, the expected fuel price changes taking effect in June are as follows:
- Petrol 93 – Decrease of R1.12 a litre
- Petrol 95 – Decrease of R1.13 a litre
- Diesel 0.05% – Decrease of R1.37 a litre
- Diesel 0.005% – Decrease of R1.28 a litre
These potential changes take into account fluctuations in the rand/US dollar exchange rate as well as international oil prices between 26 April and 15 May, however, they are not the official adjustments that are coming into effect next month as this will additionally consider any alterations in wholesale and retail margins, taxes and levies, or zone differentials.
What to expect for 2023
While fuel prices are for the moment looking to come down in June, analysts from FNB Wealth and Investments predicts that we may not be as lucky during the remainder of 2023 as prices are expected to continue on an upward trend from July onwards.
Both the US Federal Reserve and European Central Bank are expected to hike interest rates or take more drastic measures to reign in inflation this year, which could have a knock-on effect on the South African currency and therefore fuel prices, said FNB’s analysts.
“Rising real rates in these advanced economies, while South Africa’s current account falls into deficit territory and local structural constraints mount, should continue to weigh on the rand and worsen local price pressures,” said the analysts.
On the bright side, the experts said fuel prices should remain below the all-time highs of over R26 per litre that they reached in the midst of the Covid-19 lockdown.
This is due to a slowdown in global economic activity and subsequent lower oil demand, with diesel impacted more than petrol by these market conditions. Oil production has been capped by the OPEC nations in response to the slowdown in demand, but thus far this has only caused prices to buoy and has not driven a kind of push that would test 2022 highs.
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