Fuel price relief looks possible as early June data shows big over-recoveries

South African motorists may be set for meaningful relief at the pumps after early June figures from the Central Energy Fund (CEF) showed sizeable over-recoveries for petrol and diesel potentially large enough to absorb planned levy reinstatements and still leave room for price cuts.

Strong over-recoveries in early June

CEF data as of 5 June showed petrol and diesel tracking into over-recovery territory. The estimates were:

• Petrol 93: over-recovery of R2.68 per litre
• Petrol 95: over-recovery of R2.70 per litre
• Diesel 0.05%: over-recovery of R5.25 per litre
• Diesel 0.005%: over-recovery of R5.42 per litre
• Illuminating paraffin: over-recovery of R6.15 per litre

Why prices are tracking down

The reported recoveries reflected, according to the CEF figures, softer international oil prices and a relatively stable rand. The report linked the easing in crude markets to a shift in global sentiment tied to hopes of a truce between the United States and Iran, which helped stabilise oil after recent volatility.

Fuel levy reinstatements still scheduled

National Treasury began reversing temporary fuel levy relief in June by adding R1.50 per litre back to petrol and R1.97 per litre to diesel. The final phase of that reversal is scheduled for July, when a further R1.50 per litre will be added to petrol and R1.96 per litre to diesel.

Forecasts for July significant decreases projected if conditions hold

CEF projections received by the source set out the following possible changes for July if market conditions remain consistent for the remainder of the month:

• Petrol 93: decrease of 268 cents per litre
• Petrol 95: decrease of 270 cents per litre
• Diesel 0.05%: decrease of 542 cents per litre
• Diesel 0.005%: decrease of 525 cents per litre
• Illuminating paraffin: decrease of 615 cents per litre

Industry analysts cautioned that exchange rates and oil prices can fluctuate significantly, making definitive July adjustments uncertain until later in the month.

Prices and market indicators cited

The report gave market context at the time of publishing: Brent crude was reported at $96.62 a barrel and the rand/dollar exchange rate at R16.55/US$.

Current June pump prices (inland and coastal)

The source listed the following June prices:

Inland

• Petrol 93: R27.95
• Petrol 95: R28.06
• Diesel 0.05%: R27.92
• Diesel 0.005%: R29.26
• Illuminating Paraffin: R22.47

Coastal

• Petrol 93: R27.16
• Petrol 95: R27.19
• Diesel 0.05%: R27.05
• Diesel 0.005%: R28.00
• Illuminating Paraffin: R21.42

What happens next

The final overall price changes for both petrol and diesel will be confirmed later in the month; the new prices are expected to take effect at midnight at the end of the month.

Note: All figures and projections in this article are drawn from the Central Energy Fund and the reporting published by the source.

Editor’s note: article updated to correct date references and remove year-specific phrasing not present in the source material.