A win for petrol prices in South Africa
Global oil prices are heading for their biggest losing streak since March, pulling towards $60 a barrel and boosting local fuel price recoveries.
This is feeding through and building towards petrol and diesel price cuts in November, and making up for a slight weakening in the rand/dollar exchange rate.
According to Bloomberg’s analysis of the market, the main driving force behind oil’s decline is the simmering tensions between the United States and China, with another trade war looming.
Markets are keeping an eye on rising trade tensions between China and the US that could hurt global economic growth and energy demand in the world’s two biggest crude consumers.
Despite a temporary truce declared in the US-China trade war earlier this year, China has moved to tighten controls on rare-earth minerals.
These are critical for advanced manufacturing in sectors such as technology, automotive, and defence, and the United States is not happy.
However, China blames the US for the rising tensions, saying that its economic and trade responses come after the Trump administration introduced a series of restrictive measures following meetings in Madrid.
As the world’s biggest economies play the blame game with each other, oil markets have started factoring in the impact, with a renewed trade war likely to crush demand.
This also comes as global oil production ramps up, with industry bodies anticipating a significant oversupply of about 20% in 2026.
With high supply and low demand on the cards, oil prices have lost 3% this week, and almost 20% since January.
This is leading to a 16-cent to 50-cent per litre over-recovery in local pricing—a significant swing from September.
Adding to the good news for motorists, market analysts expect the declines to continue, with some even projecting a drop well below $60 a barrel, which should feed into more over-recoveries in the months ahead.
Petrol prices building for a cut
Given the drop in oil, petrol prices in South Africa are expected to fall by 58 to 61 cents per litre in November 2025, also boosted by the resilient rand/dollar exchange rate.
Diesel is building for a smaller cut at around 29 cents per litre, but this has been trending upward since the start of the month.
Expected changes (mid-month estimates):
- Petrol 93: decrease of 61 cents per litre
- Petrol 95: decrease of 58 cents per litre
- Diesel 0.05% (wholesale): decrease of 29 cents per litre
- Diesel 0.005% (wholesale): decrease of 29 cents per litre
- Illuminating paraffin: decrease of 14 cents per litre
As South Africa is an importer of oil, and trades are done in dollars, the oil price and local rand/dollar exchange are fundamental components of determining the cost to motorists.
Despite weakening against the dollar this week—as investors gravitate toward safer assets amid uncertainty, like the looming US-China trade war—the rand remains stronger, relative to September.
Looking ahead, analysts have noted that with gold and platinum prices surging higher and South Africa’s terms of trade as strong as ever, there is a high probability that the rand will regain its footing.
This means trading stronger in the coming weeks, or even attempting another push to cross the R17.00/$ level.
However, the outlook is not without its risks.
As has been seen this week, the rand has the potential to weaken rapidly, mostly taking direction from global markets.
The unit has been trading in a wider range in October, between R17.07 and R17.50/$, swinging on global risk sentiment.
As geopolitical tensions rise, speculation about US rate cuts plays out, and the prolonged US government shutdown continues, the rand may just as likely find itself on the back foot.
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