R150 petrol price joy in South Africa — with another massive cut on the cards
South African motorists paid between R149 and R264 less to fill up their petrol tanks in September 2024 than they did four months ago.
At R22.19 for a litre of unleaded 95 and R21.79 for unleaded 93, retail petrol prices in the country are the lowest they have been in about a year and a half.
In addition, for the first time since February 2023, it costs less than R1,000 to fill up with unleaded 95 inland using a 45-litre tank, the typical size for hatchbacks and small sedans.
From 2024’s highest prices per litre in May, the price to fill up one of these tanks has declined by R148.50, while the price per litre has declined by R3.30.
The price has come down by R198 for a larger 60-litre tank, while the 80-litre tanks typically found on large bakkies and SUVs cost R264 less to fill up.
The biggest factor in these reductions has been slumping global oil prices.
South Africa imports most of its transport fuel from overseas — either as oil to be refined into petroleum locally or in its final form.
Over the review period for the last four price adjustments — which ran from 26 April 2024 to 29 August 2024 — the Brent crude oil price has plummeted from more than $88 per barrel to about $77.
The strengthening of the rand against the dollar has also contributed to the relief, as oil and petroleum are sold in the US currency.
During the last review period, the dollar-to-rand exchange rate went from R18.81 to R17.76.
The price relief could be even greater from next month, with the Central Energy Fund’s data showing an over-recovery of about R1.35 for unleaded 95 and R1.26 for unleaded 93.
That could see the prices of these two fuels drop down to R20.84 and R20.53, respectively, the lowest in two and a half years.
Wholesale diesel prices are also showing over-recoveries of more than R1.00.
That is not only good news for diesel-powered passenger vehicle owners, but it could also help keep consumer price inflation in check, as many of the vehicles used to transport food and goods run on diesel.
The table below compares the cost of refilling a typical petrol tank in May 2024 with September 2024, with estimates for the potential reductions coming in October 2024 based on current CEF data.
| Tank size | May 2024 price (R25.49) | September 2024 price (R22.19) | Actual difference | Potential October 2024 price (R20.84) | Potential difference* |
|---|---|---|---|---|---|
| Unleaded 95 — Inland | |||||
| 45 litres | R1,147.05 | R998.55 | -R148.50 | R937.59 | -R209.46 |
| 60 litres | R1,529.40 | R1,331.40 | –R198.00 | R1,250.12 | -R279.28 |
| 80 litres | R2,039.20 | R1,775.20 | -R264.00 | R1,666.82 | -R372.38 |
| Unleaded 93 — Inland | |||||
| 45 litres | R1,131.75 | R980.55 | -R151.20 | R923.65 | -R208.10 |
| 60 litres | R1,509.00 | R1,307.40 | -R201.60 | R1,231.53 | -R277.47 |
| 80 litres | R2,012.00 | R1,743.20 | -R268.90 | R1,642.04 | -R369.96 |
| *Based on over-recoveries in fuel prices as of 5 September 2024. | |||||
Oil prices and rand pointing the right way
It should be noted that the end of the price review period for October 2024 is still several weeks away, so the outlook could change significantly by the time the Department of Mineral Resources confirms the actual adjustments.
Nevertheless, there are some solid early signs that another price cut is on the cards.
Firstly, Reuters reported that the OPEC+ cartel of major oil-producing countries has delayed plans to rein in production by two months.
Higher oil production means that there will be sufficient supply to meet demand, increasing the likelihood of prices remaining low or dropping.
Citi analysts who spoke to Bloomberg anticipate the Brent crude oil price will hover between $70 and $72 in the coming months.
In addition, the rand is expected to continue its good showing for the rest of 2024 and throughout 2025.
Investec has forecast that the dollar-to-rand exchange rate will average R18.00 in Q3 2024 and improve further to R17.70 in Q4 2024.
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