What’s behind the July 2024 petrol price win

  • For the second month in a row, South Africans are set to enjoy another petrol price decrease at the pumps.
  • This follows another month with lower international prices of Brent Crude Oil and a slightly stronger Rand against the US Dollar.
  • If these gains can be maintained, we may see yet another decrease for August.

As of today, Wednesday 3rd July 2024, the latest price for petrol and other fuels sets in for South African motorists. The price follows calculations from the Central Energy Fund (CEF) and sees the cost of fuels across the country decrease for the second month in a row.

According to the Department of Mineral Resources and Energy (DMRE) – which will soon simply become the Department of Mineral Resources as the Department of Energy has been separated and will be referred to as the Department of Energy and Electricity – a number of positive changes in the international and local markets have affected the July 2024 petrol price.

Today’s changes to the petrol and fuel price in South Africa are as follows:

  • Petrol 93 to decrease by R1.05 per litre,
  • Petrol 95 to decrease by 99 cents per litre,
  • Diesel 0.05 percent to decrease by 30.4 cents per litre,
  • Diesel 0.005 percent to decrease by 24.4 cents per litre,
  • Illuminating Paraffin (wholesale) to decrease by 18 cents per litre,
  • Maximum liquid petroleum gas retail price to decrease by 22 cents per kg.“

According to the DMRE, motorists are enjoying another month of lower prices thanks to an average decrease in the price of Brent Crude Oil. The price has again decreased from $82.98 down to $72.24 per barrel.

Brent Crude Oil is the raw oil product that is refined into the many fuels that we use, so its price determines the price of final fuel products internationally, like petrol and diesel. The CEF has seen that the price of Crude Oil has consistently decrease for a few months now, and if the trend continues it may help motorists in South Africa for another month.

However, the other main factor, at least for South Africans, is the US Dollar to Rand exchange rate. As South Africa purchases fuel products in dollar, a stronger Rand means cheaper petrol, diesel and others for customers at the pumps.

Between June and July, the Rand has gained against the Dollar slightly – the DMRE remarks that is become stronger by just two cents, which was enough to influence another decrease in fuel costs alongside with the lower crude oil prices.

“This led to lower contributions to the Basic Fuel Prices of all products by about 1.50 cents per litre on all products,” the department explains.

Finally, the Slate Levy for July 2024 – which is used to compensate oil companies for delays in adjustments of fuel prices at the pump – was essentially not applied at zero per litre. This also allowed prices across to decrease by 4.38 cents per litre.

If the Rand, infamously volitile as it is, and the Brent Crude Price, can remain stable, South Africans may enjoy another spate of lowering of the petrol price for August.

[Image – Photo by Jesse Donoghoe on Unsplash]


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