Daily Maverick
Dailymaverick logo

Business Maverick

Business Maverick, South Africa, Personal finance

Relief at the pumps: Big fuel price cuts to bring hope to strained households

Relief at the pumps: Big fuel price cuts to bring hope to strained households
Lisakanya Venna
By Lisakanya Venna
28 Mar 2025
Facebook
4
South African motorists can look forward to a significant drop in fuel prices come April.

The fuel price gods have finally smiled upon South African motorists. For months, the pinch at the pumps has hurt pockets, but next month, the petrol price is expected to drop by almost R1 a litre.

This welcome relief comes at a critical time for many households that have been battered by economic headwinds. The decline in fuel prices is attributed to a combination of global economic factors, including increased US tariffs and concerns about global economic growth. A stable rand-dollar exchange rate and lower international oil prices, with Brent crude oil dipping to $73.54 per barrel, have also contributed to this trend, marking a notable reversal from the recent surge in fuel prices that drove up producer inflation.

Read more: Some relief in store for consumers as fuel price set to drop

What this means for you


The Central Energy Fund (CEF) has crunched the numbers, and it is looking good. Here’s a breakdown of the expected decreases:

  • Petrol 93: down 74 cents per litre

  • Petrol 95: down 88 cents per litre

  • Diesel 0.05%: down 94 cents per litre

  • Diesel 0.005%: down 96 cents per litre


This shift in global fuel prices is a notable reversal from recent trends. In fact, recent producer inflation data revealed that fuel prices had been a significant driver of inflation, with prices rising 0.7% month-on-month in February. 

Economist predicts a bigger cut

As the fuel price landscape continues to evolve, Efficient Group chief economist Dawie Roodt expects an even more substantial decrease. Roodt said: “I feel the decrease will be around 90 cents to R1 a litre… and in fact, I believe in two months time the South African Reserve Bank could be in a position to cut interest rates.”

Senior FNB economist Koketso Mano echoed the same expectation of fuel prices falling by nearly R1 a litre in April. “We did see crude oil prices soften going into March, supported by the prospects of higher supply, mainly from Organization of the Petroleum Exporting Countries (OPEC). In addition to that, you know, the potential for a US-brokered deal to seize the Russia-Ukraine war could eventually see a liberated movement of Russian oil in the global market."
Mano noted that while risk perceptions are likely to drive some volatility in prices, the overall trend should highlight market fundamentals that are in line with contained brand crude oil prices. "That's what we anticipate going into the remainder of this year. On the rand side, this global policy uncertainty and risk aversion will also weigh on emerging market currencies. The flights to safe assets will continue to support currencies such as the dollar," she explained.


However, Mano noted that elevated gold prices, which have been upheld, will mitigate, the pressure on the rand dollar exchange rate especially with South Africa being a net exporter of that commodity.

“As the year progresses, we could see less market gyrations, and that will be positive for the rand, and other emerging market currencies. In addition, improved growth outcomes and low inflation in South Africa would benefit the rand. So, should these improvements or less market volatility materialise, fuel prices would remain contained, ultimately, an uncertain global environment comes with significant risks to the outlook, Mano said.”

Decrease trend


This expected decrease is a continuation of the downward trend seen in the second half of last year. Notably, in September 2024, fuel prices dropped significantly, with petrol decreasing by as much as R2.38 per litre and diesel by R2.11 per litre. At the time, experts predicted that lower fuel prices would support slower transport inflation and softer inflation for other goods and services. DM

Categories:

Tags: