Good news for petrol prices next week

Month-end data from the Central Energy Fund (CEF) shows that fuel price recoveries have swung in the other direction, with a small cut now lined up for petrol and diesel in March.

A weaker dollar and lower global oil prices have pushed the price recoveries for petrol 95 and diesel into positive territory—unfortunately, petrol 93 is still in line for a hike.

Petrol 95 is showing a small cut of 4 cents per litre, while diesel prices are set to come down by between 14 and 20 cents per litre.

Illuminating paraffin has also seen a swing into overrecovery, showing a decrease of 4 cents per litre on the cards.

Petrol 93 is the outlier with an under-recovery of 9 cents per litre, although this is much lower than the 18 cents per litre at the end of last week.

These are the indicators for the end of February:

• Petrol 93: increase of 9 cents per litre
• Petrol 95: decrease of 4 cents per litre
• Diesel 0.05% (wholesale): decrease of 14 cents per litre
• Diesel 0.005% (wholesale): decrease of 20 cents per litre
• Illuminating paraffin: decrease of 4 cents per litre

The weaker dollar has been the main driver of the over-recovery in prices, with global oil price—impacting international product prices used in petroleum production—creeping lower.

The movement in the rand/dollar exchange rate accounts for a 13/14 cents per litre over-recovery in pricing, while the oil price contributes to a slight over- or under-recovery, depending on the fuel type.

According to Investec chief economist Annabel Bishop, the turn for the rand is being driven by dollar weakness rather than rand strength.

The US dollar has been trading weaker since mid-January after the Trump administration pushed for a “modest” tariff regime rather than universal tariff hikes that would have fed higher inflation.

As a result, the probability of a second US interest cut has started to rise, Bishop said, from only one this year to a greater certainty of two.

However, the economist warned that the Trump administration’s plans and policies could also counter this.

South Africa’s own sagas can’t be discounted, though—although they are less pronounced.

The country experienced high drama with the 2025 Budget being postponed, and the return of stage 6 load shedding over the last weekend gave another jolt and a sharp reminder that outages are still a reality.

Despite this, Bishop said that the market has largely shrugged off the budget drama and the load shedding, noting that “investors are used to load shedding in South Africa and weak growth outcomes”.

As such, the rand is mostly being driven by international events, she said.

Oil prices turn

Oil prices have weakened quite significantly in February, heading back towards $72 a barrel after starting the month above $75.

According to director at Citadel Globa, Bianca Botes, crude oil hit two-month lows due in recent sessions due to a surprise rise in US fuel inventories.

Market analysts have projected a glut in the market, with supplies coming in stronger versus global demand which is dampened.

Much of this is again attributable to the Trump administration: with talk of boosting US oil production and the aforementioned tariff wars dampening demand.

Bloomberg analysts said that US president Donald Trump’s promises to move ahead with tariffs on its neighbours to the north and south—Canada and Mexico—kept oil futures trading at low levels.

While the timing of these tariffs is not clear, the threat is looming. Trump has also indicated that levies against the European Union are on the cards.

“That anxiety has eclipsed the possible lifts from tighter sanctions against Iran and the likelihood OPEC+ will again delay the restart of shuttered production,” the group said.

The Department of Petroleum and Mineral Resources will announce the official petrol and diesel price changes in the coming days.

The prices will take effect next week, on Wednesday, 5 March 2025.