Good news for motorists going on holiday

South African motorists are likely to pay substantially less on fuel when travelling over the coming summer holiday than they did a year ago.

Both petrol and diesel prices have declined significantly between December 2023 and November 2024.

Motorists currently pay R21.05 for a litre of unleaded 95 petrol when filling up inland, compared with R23.25 in last year’s summer holiday.

A litre of unleaded 93 currently costs R20.19, compared with R22.79 in December 2023.

Wholesale 50ppm diesel prices are also down from R21.28 to R18.01.

Assuming fuel stations did not adjust their retail margins significantly, the actual prices diesel car drivers are paying should also be around R3 less than in December last year.

About halfway through the review period for fuel price adjustments next month, the Central Energy Fund’s (CEF’s) latest unaudited data pointed toward a slight decline in retail petrol prices and a modest increase in wholesale diesel prices.

The data effective for 15 November 2024 showed that the price of unleaded 95 petrol could decline by roughly 4 cents per litre and unleaded 93 by 16 cents.

That should result in the cost of filling up a typical 45-litre petrol tank being about R124 to R125 cheaper than last year.

50ppm and 500ppm diesel are poised for increases of roughly 38 cents and 39 cents in wholesale prices, respectively.

However, the expected retail diesel prices should still be well below December 2023’s levels.

Barring some substantial movements in the oil price or an unprecedented weakening of the rand, fuel prices will be lower across the board, easing pressure on holiday budgets.

The table below compares the expected change in fuel prices from December 2023 to December 2024. While the actual prices are based on inland tariffs, the changes per litre also apply to coastal refills.

Oil price decline and stronger rand

A receding oil price has been the major driver of reduced transport fuel prices in 2024.

According to Trading Economics, the Brent Crude oil price averaged $80.58 per barrel in November 2023, compared with $71.45 this year.

The oil price has been under pressure primarily due to concerns over low demand in China, the world’s second-biggest oil consumer.

The average dollar-to-rand exchange rate has also improved slightly in favour of the South African currency, making dollar-based oil and petroleum imports cheaper.

The average annual exchange rate was about R18.45 in 2023, compared with R18.34 in the year-to-date.

This was influenced by the establishment of the government of national unity in July 2024, which is largely seen to be more pro-business.

Key improvements in South Africa’s economic indicators have also occurred since around the second quarter of 2024, including a lower inflation rate, which led to an interest rate cut.

MyBroadband calculated how much less South African motorists could pay to travel on the country’s popular long-distance routes this holiday compared to last year.

We found that the fuel costs for a one-way trip from Johannesburg to Cape Town could be nearly R300 cheaper in 2024 when using a vehicle with the International Energy Agency’s (IEA’s) average fuel consumption of 7.4 litres per 100km for South African vehicles.

The table below summarises the cost of unleaded 95 petrol for covering the one-way distances over major holiday routes in December 2023 and the potential cost in December 2024.