More good news for petrol prices is emerging as early data points to another round of fuel price cuts in July. South Africans may soon breathe easier at the pumps, thanks to positive trends in both global oil markets and the rand-dollar exchange.
According to new figures from the Central Energy Fund (CEF), motorists are on track to benefit from significant price reductions. Petrol is showing a recovery of around 29 cents per litre, while diesel is seeing a stronger over-recovery of approximately 46 cents per litre.
Although it’s still early in the month, the data strongly suggests that July will bring noticeable decreases in fuel prices.
Oil and Rand Combine to Create Over-Recoveries
Preliminary projections from CEF are promising:
- Petrol 93: Down by 30 cents per litre
- Petrol 95: Down by 28 cents per litre
- Diesel 0.05%: Down by 47 cents per litre
- Diesel 0.005%: Down by 45 cents per litre
- Illuminating Paraffin: Down by 57 cents per litre
While these are early estimates, they reflect a stable and encouraging trend. Market watchers say conditions would have to deteriorate significantly to reverse these gains.
The rand has remained under R18.00 against the US dollar, helped by a weaker greenback. Though volatility is expected to continue, improved global sentiment has given risk assets like the rand some breathing room.
Investec Chief Economist Annabel Bishop notes that despite local structural constraints, the political calm surrounding the Government of National Unity (GNU) has helped ease risk perceptions tied to the local currency.
She pointed out that the rand, which was at R19.23/$ in January and R19.93/$ in April, has improved notably. The stronger rand is playing a vital role in local fuel price relief.
Global Oil Markets Offer Further Support
Brent crude oil has mostly stayed below the $65 per barrel mark. Bloomberg reports that the price stability has been aided by easing trade tensions and a balanced market outlook, despite a possible supply glut.
Recently, oil prices dipped near $60 amid renewed US-China trade friction. However, forecasts suggest the market remains steady heading into the year’s second half.
OPEC+ nations are also contributing to market dynamics. The alliance is increasing output by 411,000 barrels per day in July, following similar increases in May and June. Though this aligns with expectations, it may place further downward pressure on global oil prices.
The Bureau for Economic Research indicated that if production rises too sharply, it might drive prices even lower — a scenario that would benefit local fuel consumers.
As things stand, the combination of a stable rand and steady oil prices supports over-recoveries. While uncertainty remains a factor, July could bring the second consecutive month of fuel price relief for South African motorists.
Should the current trends hold, drivers can look forward to real savings at the pump in the weeks ahead.