Another Fuel Price Drop on the Horizon for South Africans

Motorists may have reason to smile next month, as early data hints at another round of fuel price cuts in July.

The first week of June has already brought some promising signs. According to the Central Energy Fund, both petrol and diesel are showing solid over-recoveries. While it’s still too early to call the final figure, the numbers so far are giving South Africans a bit of breathing room — something that hasn’t come around often lately.

What the Forecast Looks Like

Here’s what the early data says:

• Petrol 93: Potential drop of 30 cents per litre

• Petrol 95: Down by around 28 cents

• Diesel (0.05%): Expected decrease of 47 cents

• Diesel (0.005%): Estimated fall of 45 cents

• Illuminating paraffin: Could drop by 57 cents

If the numbers hold, July will continue the downward trend South Africans have seen in recent months, lightening the load on many households.

Why the Drop? Thank the Rand and Oil Prices

Two key forces are working in our favour right now: a relatively stable rand and easing global oil prices.

The rand has held mostly below R18 to the dollar — a marked improvement compared to earlier this year when it briefly climbed above R19. In fact, January saw it spike to R19.23, and by April it reached R19.93 amid political jitters over the Government of National Unity (GNU) and uncertainty around the DA’s role in the coalition.

But as political noise dies down and markets regain some confidence, global investors are slowly warming up to riskier currencies like ours again. That has helped to remove some of the risk premium weighing down the rand.

Economist Annabel Bishop from Investec explains that although South Africa’s growth is still constrained by structural issues, global sentiment and local stability are softening the blow.

Trade Tensions Still a Cloud on the Horizon

But let’s not get too comfortable just yet.

In a world where a single tweet can tank the markets, ongoing global trade tensions — especially between the US and China — remain a wild card. The temporary suspension of Trump-era tariffs (which included a hefty 30% on South Africa) is currently helping to steady things, but that 90-day pause could end at any moment.

If the tariffs return, it may drag the rand back into dangerous territory, hiking fuel import costs once again.

OPEC and the Oil Rollercoaster

Oil prices are another piece of the puzzle. For now, Brent crude has stayed mostly under $65 a barrel, thanks in part to lower demand and steady supply. But with OPEC+ increasing output — 411,000 extra barrels per day expected in July — there’s concern that an oversupply could push prices down further or stir up market volatility.

According to Bloomberg, oil was as low as $60 a barrel when US-China tensions flared earlier in the year. That price level could return if the geopolitical drama escalates again.

What It All Means for You

For now, the odds are in South African motorists’ favour. Unless things take a drastic turn globally, early indicators point toward more savings at the pump in July. Whether you’re filling up for your daily commute or planning a winter road trip, that’s good news.

Of course, nothing is guaranteed. But as long as the rand holds its own and oil prices stay where they are, we might just get a bit of relief in time for the new month.

{Source: BusinessTech}

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