R2.90 per litre petrol price joy for South Africa

The past 12 months have brought continued relief for South African motorists, with a total of R2.90 per litre in petrol price cuts since June 2024.

The Department of Petroleum and Mineral Resources announced a small cut to petrol prices taking effect on Wednesday (4 June), the fourth decline in pricing this year.

2025 started off with a petrol price hike, continuing the trend of rising prices in the last two months of 2024.

The rising prices tracked global market volatility around the United States presidential elections and resultant uncertainty when Donald Trump was re-elected.

However, the rise in prices was not enough to undo a continued decline in pricing following the May 2024 elections in South Africa.

While the decline in prices cannot be attributed to local conditions alone, the outcome of the 2024 elections in May last year played a critical role in strengthening the rand.

The rand/dollar exchange rate is one of the two main components factoring into local fuel price recoveries.

A strong turn in sentiment towards South Africa with the formation of the Government of National Unity (GNU) after the elections had a significant impact on rand strength at the time.

Despite rand strength boosting recoveries in the latter half of 2024, concerns over global growth in a Trump presidency led to relatively small declines in recoveries (thus petrol price increases) at the end of the year.

This continued into 2025. A particularly surprising focus on South Africa by the Trump administration in the early months of the year also played havoc with the exchange rate.

Weathering a storm of political trouble around South Africa’s 2025 budget, the country managed to maintain an uneasy balance in recoveries.

A huge decline in global oil prices of around 15% since the start of the year thanks to the Trump administration’s tariff war helped motorists.

Tracking petrol price movements between June 2024 and 2025, petrol prices for Petrol 93 are lower by R2.67, Petrol 95 by R2.90 and diesel prices are R2.43 lower.

Fuel prices helping to keep inflation low

The continued decline in fuel prices has been a significant boon for inflation in South Africa, helping to keep headline CPI below the South African Reserve Bank’s target range.

Following a few years or sticky inflation, CPI slowly moved towards the 4.5% SARB target and then below the lower-bound of the range (3%) in early 2025.

While many economists expected inflation to start rising again, back towards 4.5%, it has constantly surprised to the downside, staying under the 3%.

At its most recent Monetary Policy Committee meeting, the Reserve Bank attributed this lower-than-expected inflation level to declining fuel prices.

The central bank has also adjusted its average CPI expectation for the year lower to 3.6% from over 4.0% before.

Thanks to the low inflation environment, the Reserve Bank was confident enough to cut interest rates by 25 basis points in May, taking cumulative cuts to 100bp since September 2024.

If inflation continues to follow this lower trend, the likelihood of further cuts of 25bp could follow, despite ongoing certainty in global markets due to the tariff war.

For fuel prices, the outlook is positive, with economists anticipating the rand to maintain its current levels or strengthen further, while oil markets are expected to remain volatile, but with a tilt towards lower demand and higher supplies.