South African consumers, who have been grappling with soaring fuel prices for several years, may finally see a respite as recent trends suggest a downward shift in petrol and diesel costs.
Recent reports from the Central Energy Fund indicate that, due to declining global oil prices, petrol prices are expected to decrease by approximately R1.05 for 93 Unleaded and R1.12 for 95 Unleaded starting early October. Diesel prices are also projected to drop by between R1.10 for 50ppm and R1.12 for 500ppm.
While these adjustments are not yet confirmed, it is anticipated that South Africans will benefit from more substantial fuel price reductions in the upcoming month. Should these forecasts hold true, the price of a litre of 95 Unleaded petrol is expected to be around R20.28 along the coast and R21.07 in Gauteng, with 93 Unleaded petrol settling at approximately R20.74.
Both petrol and diesel prices are forecasted to reach levels not seen since February 2022, offering much-needed relief to motorists across the nation.
The past three years have been marked by significant volatility in local fuel prices. In July 2022, the cost of 95 Unleaded petrol peaked at an unprecedented R26.90 at coastal stations before declining to R22.81 by the end of that year. Throughout 2023, petrol prices fluctuated between R20.75 and R23.82.
In January 2024, coastal 95 Unleaded petrol was priced at R21.77. However, within four months, prices surged by R2.93 to reach R24.70 in May. Subsequently, there was a consistent downward trend, with prices decreasing by R3.30 over the next four months, resulting in petrol becoming slightly cheaper in September compared to January.
The sustainability of this positive trend remains uncertain. International oil prices have generally been on a downward trajectory throughout September, influenced by weak economic indicators from major regions such as the United States, China, and Europe. On September 26, Brent Crude oil was trading at $73.46 (R1,262), which is lower than the August average of $78.54 and the July average of $83.55.
Additionally, the strengthening of the rand has contributed to the favorable fuel price scenario, with the currency falling below the $17.20 mark on Thursday. However, this factor plays a lesser role compared to the impact of declining global oil prices.
