Big trouble for petrol prices in May

Following two months of petrol and diesel price cuts in South Africa, the prospects for May are much dimmer as market turbulence starts weighing on recoveries, and the rand crashes past R19 to the dollar.

April has started off in a rough spot for fuel prices as the escalation of the United States’ tariff war causes chaos in global trade, and local anxieties over the future of the Government of National Unity ply pressure on the rand.

This means the first week of the month is ending on shaky ground when it comes to fuel price recoveries.

According to the latest data from the Central Energy Fund, petrol prices are showing an under-recovery of between 9 and 15 cents per litre, while diesel is still in positive territory with an over-recovery of around 27 cents per litre.

• Petrol 93: increase of 15 cents per litre
• Petrol 95: increase of 9 cents per litre
• Diesel 0.05% (wholesale): decrease of 26 cents per litre
• Diesel 0.005% (wholesale): decrease of 28 cents per litre
• Illuminating paraffin: decrease of 16 cents per litre

The start of the month is usually too early to make any certain calls for fuel price changes, however, the data does serve as an indication of where pricing is likely to go.

If the month starts with a sizeable over-recovery, markets would have to experience a bigger turn for it to reverse into an under-recovery—and the opposite is also true.

If the month starts with a mix or with recoveries close to zero, it usually means a lot of volatility is in store.

As it stands, April is starting off in highly volatile territory, and a clearer picture for May will only start forming later in the month.

Markets are still digesting and processing the so-called “Trump tariffs” introduced this week, which have sent markets tumbling, including oil.

Trump announced a global 10% import tariff as a baseline on Wednesday (2 April), with a long list of countries being saddled with even higher tariffs due to their bigger trade imbalances.

South Africa was hit with a 30% tariff, but many key exports—like gold, platinum and other metals—are exempt.

The tariffs have worries that global trade tensions will escalate and dampen growth, cutting demand for oil.

This is in addition to oil-producing nations’ (OPEC+) decision to increase oil output, increasing overall supply and further dampening pricing.

Crude oil futures have reversed their gains from early March, with prices falling to below $69 a barrel.

Usually, a lower oil price would be a big contributor to over-recoveries in local fuel; however, this is weighed against the rand/dollar exchange rate and how it performs relative to the previous month.

Average oil pricing is currently higher than early March 2025, so recoveries range from slightly negative (-5 cpl for petrol) to positive (+35 cpl) for diesel.

The real knock for recoveries is the rand.

Along with unsettling global oil, the Trump tariffs also knocked currency markets, putting them squarely in risk-off mode.

This hit the rand and pushed it much weaker against the dollar.

The rand’s woes were exacerbated by local politics as well, with the Government of Nation Unity’s future coming under question.

This follows the second largest party in the GNU—the Democratic Alliance—breaking with most of its other partners to vote against the 2025 budget in parliament.

The break would be enough to present a crisis for the GNU, but the leading African National Congress (ANC) passed the budget by shopping around for support from non-GNU parties.

With the two biggest parties of the GNU breaking lines in the shaky coalition, its future is hanging by a thread.

Economists and analysts have said that the collapse of the current GNU would introduce significant uncertainty to governance in South Africa—hence the market’s response and the crashing of the rand.

While the ANC has stated that the GNU will continue, even without the DA, markets will be looking at the composition of whatever coalition emerges.

As uncertainty and volatility is the theme of the day, the rand has tumbled to over R19 to the dollar, contributing to an under-recovery in fuel prices.