• Motorists in South Africa could be given some relief as the price for petrol and other fuels is expected to decrease significantly.
• Both grades of petrol are looking at a more than R1 per litre decrease in price, with diesel looking at similar.
• Lower international oil prices are driving the major decrease, but the country’s current political situation may erase some gains.

Ahead of the Department of Mineral Resources and Energy (DMRE)’s official changes to fuel and petrol prices in South Africa for June, respected on Wednesday 5th June, several other bodies in the country have given predictions for the expected prices ahead of time, taking into account internal factors, like the price of Brent Crude Oil.

According to the Central Energy Fund (CEF)’s predictions (PDF) for the market, based on trends in pricing for Crude Oil and expected changes in the USD/ZAR exchange rate, the following will be the changes to petrol, diesel and paraffin prices for June:

• Petrol 93 to decrease by R1.06 per litre,
• Petrol 95 to decrease by R1.06 per litre,
• Diesel 0.05 percent to decrease by R1 per litre,
• Diesel 0.005 percent to decrease by 90 cents per litre,
• Illuminating Paraffin (wholesale) to decrease by 80 cents per litre.

These predictions will likely change somewhat, but if the final prices from the DMRE are anywhere near those foreseen by the CEF, South African motorists are headed for some relief in June, after increases in both grades of petrol were published in May.

Last month, the Rand’s continued depreciation against the US Dollar was one of the main drivers for increasing petrol prices. As for June, it is expected decreases to the international price of Crude Oil that is driving the relief.

A stronger Rand has also doubled gains made by the slumping oil prices worldwide, with the Rand at R18.73 to the Dollar at press time, and the price of Brent Crude at $79.84 per barrel, with continued depreciation on the cards, at least in a small capacity.

The petrol price in June could see further changes depending on the political situation following the conclusion of the 2024 general elections in South Africa. With the ANC losing its historic majority, it is now looking for coalition partners.

Coalition governments are seen as unfavourable to international markets, due to perceived instability. Depending on which coalition partners the ANC choose, we could see the Rand depreciate more against the Dollar, knocking down some of the price gains expected for June.

[Image – CC 0 Alexander Fox | PlaNet Fox from Pixabay]