R191 petrol price relief for South African motorists
South African motorists are saving, on average, R191 per tank of petrol since price cuts began in May and April for petrol and diesel, respectively, as of September 2024.
In a welcome development for South African motorists, petrol and diesel prices are set to drop once again, marking the fourth consecutive cut at the pumps.
This decline comes on the back of a stable global oil market, a stronger rand against the US dollar, and positive trends in investor confidence in South Africa’s economy.
For motorists, petrol prices will drop by 92 cents per litre, while diesel prices will fall by between 79 and 105 cents per litre.
These adjustments reflect a significant easing of costs at the pumps and bring some relief to consumers after months of high fuel prices.
The reductions will take effect in September, with the new prices regulated and adjusted by the government, as they are on the first Wednesday of every month.
Fuel prices in South Africa are influenced by a combination of international and domestic factors.
On the international front, the price of petrol is largely determined by the cost an importer would incur to purchase it from a refinery abroad and ship it to South Africa.
This cost is then augmented by government-imposed taxes, levies, and margins, which together make up the final retail price of fuel.
The Central Energy Fund (CEF) plays a critical role in this process, calculating daily prices for petrol and diesel and illuminating paraffin on behalf of the Department of Mineral Resources and Energy (DMRE).
However, the price changes that motorists see at the pumps are based on a monthly average of the previous period’s data.
This results in a lag between global price trends and local price adjustments, with South Africa’s fuel prices typically reflecting international shifts about a month later.
The recent decrease in petrol prices comes after a relatively strong start to economic recoveries in early August.
During this time, the rand strengthened against the dollar, buoyed by increased optimism in the country’s Government of National Unity (GNU) and an influx of investment.
Although the rand experienced some volatility earlier in the year, with concerns over a potential recession in the United States, it regained strength as those fears subsided.
This stronger rand, combined with stabilising global oil prices, has paved the way for the current cuts.
Global oil prices have remained balanced despite market fluctuations.
The average price of Brent Crude oil, a key benchmark, fell from $83.55 to $78.54 per barrel during the review period.
This decline was largely driven by increased oil production from major producing nations, despite concerns over lower demand and the potential for interest rate cuts by the US Federal Reserve.
Investment strategist Izak Odendaal of Old Mutual Wealth highlighted that while oil prices have remained relatively stable, they are subject to cyclical fluctuations and may eventually recover.
However, for the time being, the stabilised oil market presents an advantage for consumers, as lower fuel costs directly benefit motorists.
How much motorists will save per tank of petrol
This recent price cut also comes after a period of significant price increases earlier in the year.
From January to May 2024, the price of petrol rose by as much as R3.00 per litre, with inland unleaded petrol reaching a high of R25.49 for 95 octane and R25.15 for 93 octane.
These increases came close to the record highs experienced in July 2022, when prices peaked at R26.74 for 95 octane and R26.31 for 93 octane per litre.
However, the downward trend in recent months has been equally significant.
Since May, petrol prices have retreated by as much as R3.36 per litre, providing relief to South African motorists.
The latest round of cuts means that drivers can expect to save at the pumps, though the exact amount will depend on the size of their vehicle’s fuel tank.
BusinessTech calculated the average petrol tank size based on the top-selling cars and bakkies in South Africa for 2024.
The tanks ranged from 37 litres (found in models like the Suzuki Swift and Toyota Starlet) to 80 litres (in the Toyota Hilux and Ford Ranger).
The weighted average tank size for these vehicles is approximately 56.8 litres.
Based on this average, motorists filling up with Petrol 93 will save about R191 per tank, while those opting for Petrol 95 will save roughly R188 since the highs in May.
As both local and global factors continue to influence fuel prices, the recent stability in the oil market and the strengthening of the rand offer a welcome reprieve for consumers.
The table below outlines the savings for owners of popular vehicles when filling up with inland Petrol 93 or Diesel 0.05%.
| Car | Tank Size (l) | May 2024 price (R25.15) | Sep 2024 price (R21.79) | Saving per tank |
|---|---|---|---|---|
| Toyota Hilux | 80* | R1,796 | R1,567 | R229 |
| Ford Ranger | 80* | R1,796 | R1,567 | R229 |
| Toyota Corolla Cross | 47 | R1,182 | R1,024 | R158 |
| VW Polo Vivo | 45 | R1,132 | R981 | R151 |
| Isuzu D-Max | 76* | R1,706 | R1,489 | R217 |
| Suzuki Swift | 37 | R931 | R806 | R125 |
| Toyota Starlet | 37 | R931 | R806 | R125 |
| Hyundai Grand i10 | 60 | R1,509 | R1,307 | R202 |
| Chery Tiggo 4 Pro | 51 | R1,283 | R1,111 | R172 |
| Haval Jolion | 55 | R1,383 | R1,198 | R185 |
| Average: | 56.8 | R1,429 | R1,238 | R191 |
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