July fuel price outlook: Big petrol cut still on track, diesel looking iffy
2024 has not been kind to South African motorists, but there is some good news on the horizon with petrol prices looking set to fall in July.
According to the latest update from our number-crunching friends at the Central Energy Fund (CEF), a petrol price decrease in the region of R1 is looking likely for next month.
However the picture is not crystal clear as the average over-recovery of R1.07 for 95 Unleaded, at the time of writing, has been on a slight downward trajectory as the outlook has deteriorated.
The diesel equation is deteriorating at a more rapid rate and while the current picture points to reductions in the region of 40 cents, that could easily fall below the 20 cent mark if current trends prevail.
Should the R1 petrol price cut materialise, 95 Unleaded petrol will fall to around R22.46 at the coast and R23.25 in Gauteng, where 93 ULP will adjust to around R22.91.
“These decreases, if materialised, will go a long way to further alleviating the fuel price burden - and its associated impact on other prices - felt by millions of South Africans and is certainly welcome,” the Automobile Association said.
The current over-recovery is largely driven by lower international oil prices earlier in the month, with Brent Crude dipping below the $80 (R1,440) mark. While prices have since risen to around $85, the rand recently hit an 11-month high, dipping below the $18 mark at the time of writing on June 19 on optimism surrounding South Africa’s Government of National Unity.
Whether this currency strength will be enough to counteract rising oil prices between now and month end remains to be seen. We’ll find out for sure when the Department of Mineral Resources and Energy announces the official fuel price adjustments on July 1.
The predicted petrol price cuts will bring prices closer to where they were in January.
While this month saw a very welcome petrol cut of R1.24 per litre, this came on the back of a spate of increases that saw the price of petrol increasing by R2.93 between January and May.
Diesel prices have increased by just 33 cents between January and June, which should prove instrumental in keeping general inflation at bay.