South African Motorists Poised for Fourth Consecutive Fuel Price Cut in September

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Published by Everything ZA News

Motorists in South Africa can look forward to a continued reduction in fuel prices in September, marking the fourth consecutive monthly decrease. According to data from the Central Energy Fund (CEF) for the third week of August, an over-recovery in petrol and diesel prices is on the horizon, driven by a stronger rand and lower global oil prices.

The expected changes in fuel prices are as follows:

Petrol 93: Decrease of 73 cents per litre
Petrol 95: Decrease of 78 cents per litre
Diesel 0.05% (wholesale): Decrease of 62 cents per litre
Diesel 0.005% (wholesale): Decrease of 88 cents per litre
Illuminating Paraffin: Decrease of 88 cents per litre

The over-recovery in prices has been positively influenced by the strengthening of the rand and declining global oil prices. The current data suggests a more favorable outcome than previously anticipated, with a potential price reduction around 10 cents per litre better than mid-August estimates.

The anticipated price cut will bring petrol prices into positive territory for South African motorists. After significant price hikes earlier in the year, which saw petrol prices surge by R3.00 per litre between January and May 2024, the expected September reduction will result in a cumulative decrease of R3.23 since June. This slight but positive swing in fuel prices—approximately 23 cents per litre—will provide some relief for consumers.

The reduction in fuel prices is already making an impact on the national economy. Headline inflation for July improved to 4.6%, exceeding market expectations. The drop in fuel prices contributed to this improvement, with fuel inflation decreasing from 4.6% in June to 3.6% in July.

One of the significant factors contributing to the fuel price cut is the strengthening of the rand. The local currency, which initially contributed to an under-recovery earlier in the month, has since swung to an over-recovery of 3 cents per litre. This improvement comes as markets stabilized following a panic over a potential recession in the United States, allowing the rand to regain its relatively stronger position seen in July.

With September’s expected fuel price cut, South African motorists and the broader economy can anticipate further relief and stability in the coming months.