Fuel price cuts for July 2024

So, the elections and the sardines have come and gone and we all wait, with bated breath, about the cabinet composition from the Government of National Unity (GNU). But life continues to tick by with some more good news for motorists. Could it be another fuel price decrease? Certainly seems that way. Although the latest data from the Central Energy Fund (CEF) shows that fuel price recoveries have pulled back by around 50 cents per litre since the start of the month—motorists are still lined up for a sizeable cut in July.

At the end of the third week in June, fuel price recoveries are sitting at between R1.04 and R1.10 per litre for petrol and a smaller 34 to 40 cents per litre for diesel. This is down from the over R1.50 per litre cut that was on the cards at the start of the month—and despite the rand’s surge this past week to trade under R18/$. With that said, here is the expected decrease from the first Wednesday of July:

Petrol 93: decrease of R1.10 per litre

Petrol 95: decrease of R1.04 per litre

Diesel 0.05% (wholesale): decrease of 36 cents per litre

Diesel 0.005% (wholesale): decrease of 31 cents per litre

Illuminating paraffin: decrease of 28 cents per litre

While the rand has been stronger this week thanks to markets putting faith in the new GNU—which many are banking on to bring stability and reform in government—the currency is, on average, still trading higher than in May of just under R18.22 to the dollar. 

This means that the exchange rate is still contributing to a small (7 cents per litre) under-recovery in prices. If the current exchange rate is sustained until the end of the month, the average for June will track lower and likely lead to an over-recovery of a few cents per litre.

Oil Price

The main driver behind the fluctuations in fuel price recoveries is the global oil price, which has trended higher since the start of the month. Recently, Brent crude was trading at close to $86 a barrel – much higher than the month’s start at under $80 a barrel. The tone on oil has reversed in recent weeks, with this week presenting the first back-to-back increase in prices since April.

While the petrol price cut expected for July is now smaller than projections at the start of the month, the coming cut is still great news for inflation. Should they all play their cards right at the GNU, then we can expect a more robust economy and with that a stronger rand against the greenback and with that, further decreases in the price of fuel. We just have to stay hopeful that things generally will improve in this beautiful country of ours.

Happy Motoring!