Good News! Fuel prices to drop again.

It’s good news for motorists again. For the fifth month in succession, the price of fuel is set to fall and that can only be good for motorists and augurs well for the motoring industry as a whole. Big drops in the prices of fuel and diesel seems likely.

In the early parts of the year, motorists were battered with hefty increases that left many thinking how much more can consumers in general stomach. But that onslaught eased quite nicely in the past months and indications are rife that consumers can look forward to further petrol and diesel price decreases on the first Wednesday of October.

According to the latest daily snapshot released by the Central Energy Fund (CEF) a few days ago, the current strong over-recovery on petrol is pointing towards price decreases of around R1.34 for 95 Unleaded petrol and R1.25 for 93 Unleaded.

Diesel is looking set for smaller but still significant cuts of between R1.07 (500ppm) and R1.13 (50ppm).

As per usual cautionary, the outlook could still change significantly between now and month-end, particularly given the volatility we’ve seen with international oil prices this year amid conflicts in the Middle East.

Should the above predictions materialise, petrol prices will reach their lowest levels since January 2022, with 95 Unleaded retailing at around R20.06 at the coast and R20.85 in Gauteng, where 93 Unleaded should recede to around R20.54.

Possible Decreases:

Petrol 93: decrease of 119 cents per litre

Petrol 95: decrease of 128 cents per litre

Diesel: decrease of 110 cents per litre

Illuminating Parrafin: decrease of 104 cents per litre

Slump in oil demand

The biggest factor in these reductions has been slumping global oil prices. South Africa imports most of its transport fuel from overseas — either as oil to be refined into petroleum locally or in its final form. Over the review period for the last four price adjustments — which ran from 26 April 2024 to 29 August 2024 — the Brent crude oil price has plummeted from more than $88 per barrel to about $77. The strengthening of the rand against the dollar has also contributed to the relief, as oil and petroleum are sold in the US currency. During the last review period, the dollar-to-rand exchange rate went from R18.81 to R17.76.

Whichever way one looks at it, it’s a huge relief for motorists.