Petrol price joy on the cards for May

A decrease in petrol and diesel prices looks likely for May due to lower international product prices. 

The latest data from the Central Energy Fund (CEF) points to an over-recovery in prices, with petrol prices showing an over-recovery of between 10 and 14 cents per litre.

Diesel prices also show an overrecovery of about 35 cents per litre, while illuminating paraffin shows an overrecovery of 27 cents per litre.

Data for the end of the first week in April show a significant over-recovery in prices, with petrol showing an over-recovery of between 70 and 83 cents per litre and diesel at around 78 cents per litre.

The change is mainly due to the drop in international product prices and movement, as the rand’s weakness in March has led to an undersupply in the exchange rate.

The currency has been at the mercy of heightened volatility amidst local and international developments.

If market conditions hold for the rest of the month, motorists will see the second straight month of price cuts, following a 95 petrol price cut of 72 cents per litre, which took a litre of inland 95 petrol to R21.62.

However, it should be noted that the start of the month is generally too early to say for sure what the prices will be. However, it remains a solid indicator of what lies ahead. 

The over-recovery in prices means that markets would have to experience a significant turn to reverse into an under-recovery. 

As it stands, May is starting on the front foot when it comes to fuel price recoveries, even if the cuts do look less likely to be as large as they were in April.

• Petrol 93: decrease of 10 cents per litre
• Petrol 95: decrease of 14 cents per litre
• Diesel 0.05% (wholesale): decrease of 35 cents per litre
• Diesel 0.005% (wholesale): decrease of 36 cents per litre
• Illuminating paraffin: decrease of 27 cents per litre

What’s driving the decrease

The movement in international product prices has led to the expected decrease in fuel prices, showing positive movements of between 43 and 71 cents.

Oil prices have dropped significantly in recent weeks due to fears of a global trade war between the world’s two largest economies – the USA and China.

Although US President Donald Trump has reduced some of his more intensive tariffs on other countries, the USA will maintain high tariffs on China following Beijing’s retaliatory measures.

China has recently imposed tariffs of 125% on goods coming from the USA, while Chinese goods face tariffs as high as 145%.

South Africa’s tariffs have been slashed for 90 days, declining from 30% to the 10% global minimum imposed by Trump.

The increased tariffs and political tensions with the United States saw the rand hit its worst-ever level against the USA earlier this week.

However, following the drop in tariffs, the rand dropped from an all-time high of R19.93 per dollar to the current level of R19.31.

Although the tariff relief has buoyed the rand, local tensions continue to weigh on the currency as the future of the Government of National Unity (GNU) remains unclear.

The DA’s position in the GNU is in the balance after it voted against the 2025 National Budget, which was passed with support from non-GNU members Build One South Africa and ActionSA.

South Africa’s second-largest party is seen as incredibly business-friendly, and its departure raises concerns about a rise in populism and smaller parties joining and acting as kingmakers in parliament.