Big petrol price cuts likely for June

The latest projected fuel prices points to some welcome relief at the pumps for South African motorists who have had to navigate a taxing road of petrol price hikes in recent months.

Late-month unaudited data from the Central Energy Fund (CEF) shows that petrol prices are likely to come down by around R1.06 per litre, while diesel looks set to decrease by 90 cents for 50ppm, and R1 for the 500ppm.

If the current over-recoveries on petrol and diesel prices hold, the price of 95 unleaded petrol will drop to around R23.64 at the coast and R24.43 in Gauteng. 93 unleaded will decrease to around R24.09.

Should the CEF’s predictions prove accurate, diesel drivers can expect to pay less than R22/litre at the pumps next week.

June fuel price: Expected changes in petrol, diesel and paraffin

• Petrol 93: Decrease of R1.06 per litre;
• Petrol 95: Decrease of R1.06 per litre;
• Diesel 500ppm: Decrease of R1 per litre;
• Diesel 50ppm: Decrease of 90 cents per litre; and
• Illuminating paraffin: Decrease of 80 cents per litre.

Petrol price pain so far

 This will be the first decrease for petrol drivers since January this year.

The price of both 93 and 95 unleaded petrol increased on 1 May by 37c/litre, pushing the price of 93ULP to R25.15/litre and 95ULP to R25.49.

The diesel price drop of 30c/litre (500ppm) and 36c/litre (50ppm) in May, has at least softened the blow of fuel prices on inflation, which is currently sitting at 5.2%.

Main fuel price drivers: Rand/dollar, global oil prices

Next week Wednesday, 6 June, the Department of Mineral Resources and Energy (DMRE), will adjust the country’s petrol and diesel prices at the pumps.

The CEF, a state-owned energy company reporting directly to the DMRE, looks at pertinent data such as the rand/dollar exchange rate and global oil prices for its snapshots.

The current predicted fuel price decreases come mainly as a result of lower global oil prices, which have contributed about 73 cents to the month’s petrol price over-recovery, as well as a stronger rand.

• At the time of writing on 31 May, the rand was trading at R18.86 against the American greenback.
• The price of Brent Crude Oil stood at $82 per barrel.

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2024 elections: Some fuel for thought…

The rand went into a tailspin on Thursday, weakening as much as 2% at one point, after early results indicated the governing African National Congress (ANC) was likely to fall well short of a majority.

At the time of writing on Friday, the rand slipped 0.05% weaker than its previous close due to fears that the ANC could form a coalition with radical parties following this week’s election.

A coalition situation is deemed unfavourable by the international business community and could see the local currency depreciating, which would have a knock-on effect for fuel prices from July onwards.

ALSO READ: Zille: ‘We love South Africa too much’ to allow a coalition between ANC, EFF or MK

Official fuel price: DMRE has the final say

The CEF’s predictions, however, come with a caveat as factors – such as the DMRE’s slate levy or retail margin changes – could still have a bearing on the final fuel prices, which are due to be announced by the department next week.

• The official fuel price adjustments will come into effect on Wednesday, 5 June.