You are paying a lot less for petrol in South Africa right now – with more cuts on the way
South Africans have seen the first sign of reprieve from soaring petrol prices this month – and the trend downwards is likely to continue.
On Wednesday (3 August), the domestic petrol price came down by R1.32 per litre, with diesel prices dropping slightly less by between 88 and 91 cents per litre.
The Automobile Association (AA) said the outlook for petrol prices in the country is positive, with the potential for another price drop in September if the international oil price – one of the key drivers of high petrol prices – continues to decline.
Annabel Bishop, chief economist at Investec reiterated the AA’s view, stating that another petrol price cut of around R3.00 per litre is building for September.
She added that inflationary price pressures that affect fuel, food and energy will likely slow in the later parts of this year.
“While the risk to inflation in the first half of 2022 was to the upside, the risk in the second half may well prove to be to the downside if international commodity prices maintain their moderation, which has occurred on slowing global demand,” said Bishop.
Here is how much you are now saving on petrol:
| Tank size | 93 unleaded | Cost subtracted in August | 95 unleaded | Cost subtracted in August |
|---|---|---|---|---|
| 45 litres | R1 124 | -R59.95 | R1 143 | -R60.30 |
| 60 litres | R1 499 | -R79.60 | R1 525 | -R79.40 |
| 80 litres | R1 999 | -R105.80 | R2 033 | -R106.20 |
Bishop noted that the oil price reversed in July, from a high of $117 per barrel in June, to around $105 per barrel on average in July. The table below illustrates the price change between July and August:
| Inland | July official | August official |
|---|---|---|
| 95 Petrol | R26.74 | R25.42 |
| 93 Petrol | R26.31 | R24.99 |
| 0.05% diesel (wholesale) | R25.40 | R24.52 |
| 0.005% diesel (wholesale) | R25.53 | R24.62 |
| Illuminating Paraffin | R19.86 | R18.42 |
International oil
Global economic slowdown is spurring demand and forcing the price of oil down, with prices collapsing to the lowest level in six months as key time spreads contract, reported Bloomberg.
After surging in the first five months of the year crude’s rally has been thrown into reverse, with losses deepening this month after falls in June and July, said Bloomberg.
“The sell-off, which has wiped out gains triggered by Russia’s invasion of Ukraine, will ease the inflationary pressures coursing through the global economy that have spurred central banks including the Federal Reserve to hike rates.”
Read: Food price shocker – South Africa’s middle class in trouble of shrinking
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