Fuel forecast: Petrol and diesel may be cut next month, if oil weakness lasts
While motorists will pay the full fuel levy for the first time in months in August, there may be some price relief thanks to a weaker oil price.
At the current oil prices, Central Energy Fund data point towards cuts of more than 50c in petrol.
However, there is still some time to go before prices are determined.
After much pain at the fuel pumps, there’s a chance that South Africans will finally get a break next month.
According to the latest data from the Central Energy Fund, petrol prices currently look set for cuts of between 53c and 60c per litre, depending on the grade of fuel. Diesel could be reduced by around 28c – if the oil price and rand exchange rate remain at current levels for the rest of the month.
"There figures will likely change, though, as there is still some time to go before the actual adjustment is made," says Automobile Association (AA) spokesperson Layton Beard.
While the rand crashed through R17/$ for the first time since 2020 last week, Brent crude oil prices have fallen by more than 10% since the start of July. Demand for oil has started to weaken in response to red-hot prices. Growing fears about a global recession are also weighing on demand. Last week, oil prices dropped below $95 a barrel for the first time since the invasion of Ukraine. In March, oil was close to $130.
Local fuel prices are determined by international oil prices, as well as the dollar-rand value, as South Africa buys oil in dollars.
Countering the positive impact of the weaker oil price, is the reinstatement of the full petrol levy for the first time in months.
In April, government cut the fuel levy by R1.50 a litre in an effort to relieve the economic stress of surging fuel prices. At the start of July, that was lowered to only 75c - and the full levy of R1.50 will take effect from next month.
The fuel prices are usually adjusted on the first Wednesday of a month.
This month, petrol prices were hiked by more than 10%. Gauteng unleaded petrol is currently 54% more expensive than a year ago.