R200 petrol price joy

South African motorists could pay well over R200 less to fill up their petrol tanks next month than they did at the same time last year.

According to the latest data from the Central Energy Fund (CEF), the retail prices of unleaded 95 and unleaded 93 petrol are both set to be reduced by over R1 in October 2024.

As of 25 September 2024, unleaded 95 showed an over-recovery of about R1.13, while unleaded 93 was at an over-recovery of R1.05.

Should the over-recoveries remain roughly the same up to the end of the petrol price review period, a litre of unleaded 95 petrol will set you back R21.06 inland.

That is R4.62 less than the same petrol would have cost a year ago.

From Wednesday, 2 October 2024, filling up a 45-litre tank, the typical size for hatchbacks, crossovers, and small SUVs, should cost around R950.85 if you use unleaded 95 petrol.

That is roughly R208 — or 18% — less than it cost to fill the same vehicle in October 2023.

Those using unleaded 93 petrol will be paying R202 less than in October 2023.

Motorists with big petrol-powered double-cab bakkies and large SUVs with 80-litre tanks can look forward to paying roughly R370 less for a full tank than last year.

Wholesale 50ppm and 500ppm diesel prices are also set for declines of R1.10 and R1.12, respectively.

The actual reduction at the pumps will vary from one station to the next, as diesel retail prices are not regulated, and station operators can add their own profit margins.

The table below compares the price to fill up three standard petrol tank sizes when buying petrol inland in October 2023 and September 2024 and the potential price for October 2024.

Although the total amounts to refill tanks on the coast will be cheaper, the differences between the three months will remain the same.

Tank size	October 2023 price (R25.68)	September 2024 price (R22.19)	Actual difference	Potential October 2024 price (R21.13)	Potential difference*
Unleaded 95 — Inland
45 litres	R1,155.60	R998.55	-R157.10	R950.85	-R207.90
60 litres	R1,540.80	R1,331.40	–R209.40	R1,267.80	-R277.20
80 litres	R2,054.40	R1,775.20	–R279.20	R1,690.40	-R369.60
Unleaded 93 — Inland
45 litres	R1,134.90	R980.55	-R154.35	R933.30	-R201.60
60 litres	R1,509.00	R1,307.40	-R201.60	R1,244.40	-R264.60
80 litres	R2,017.00	R1,743.20	-R273.80	R1,659.	-R358.40
*Based on CEF’s over-recoveries in fuel prices as of 25 September 2024.

Oil price plunge and stronger rand

The latest reductions are attributable to two factors — a drop in the average Brent Crude oil price and a significant strengthening of the rand — both of which have contributed to a decline in the Basic Fuel Price.

Petroleum is refined from oil, which is sold in US dollars.

According to Trading Economics, the average price of a barrel of Brent Crude Oil was down nearly 8% between August and September 2024.

The rand’s value against the dollar has also improved substantially, primarily due to a big interest rate cut in the US.

That country’s Federal Reserve dropped its repo rate by 50 basis points — much more than analysts had expected. It was also the first rate cut in four years.

Interest rate cuts typically result in a country’s currency weakening because it encourages foreign investors to take their money out of government bonds.

The South African Reserve Bank was more conservative with a 25 basis point cut, taking the repo rate down to 8% and prime lending rate to 11.5%.

That has ensured the rand has continued to trade strongly, supported by positivity around a more pro-business Government of National Unity (GNU) and significantly lowered inflation in the past few months.

The rand was trading at an average of around R18.04 during August 2024, most of which was included in the review period for determining September’s prices.

In the ongoing review period, it has consistently closed below R18 to the dollar and was dropping to around R17 to the dollar by Friday, 27 September 2024.