The last few days of June are showing a strong over-recovery in fuel prices of around R1.00 per litre, meaning a price cut is all but guaranteed for July.<\/p>\n\n\n\n
According to the latest data from the Central Energy Fund (CEF), petrol prices are showing an over-recovery of between R1.01 and R1.07 per litre <\/strong>for petrol and a smaller 27-33 cents per litre for diesel<\/strong>.<\/p>\n\n\n\n This comes as the over-recovery has been sustained for most of the month.<\/p>\n\n\n\n The stronger showing for local pricing is due to a stronger rand in June, which has almost completely reversed its contribution to an under-recovery in prices.<\/p>\n\n\n\n The rand\/dollar exchange rate is largely flat, contributing only 1 cent per litre to an under-recovery.<\/p>\n\n\n\n Global oil prices are the biggest factor to thank for lower pricing coming next week, covering the bulk of the over-recovery.<\/p>\n\n\n\n Oil prices lifted in June when compared to May, eating away at some of the positive contributions to lower local fuel prices.<\/p>\n\n\n\n However, prices have come down steadily year-to-date, and have held steady in the last week.<\/p>\n\n\n\n According to Bloomberg analysis, oil was steady near its highest close in eight weeks amid simmering geopolitical tensions from Yemen to Russia, trading around $86 a barrel.<\/p>\n\n\n\n Prices have been at their strongest levels since late April. <\/p>\n\n\n\n This is due to Houthi militants ramping up attacks on ships off Yemen recently, while other geopolitical tensions\u2014like Russia blaming the US for a missile strike on occupied Crimea and warning of \u201cconsequences.\u201d<\/p>\n\n\n\n Bloomberg said that in addition to the higher prices, markets are anticipating a tighter supply in the months ahead, warning that global markets are set for a supply deficit in the coming quarter.<\/p>\n\n\n\n However, these factors are unlikely to impact the immediate-term over-recovery in South Africa, as the end of the month approaches.<\/p>\n\n\n\n The rand could swing the final price by a few cents either way, given the inherent volatility in the local markets as they await president Cyril Ramaphosa’s announcement of a new cabinet.<\/p>\n\n\n\n Investors and analysts have been left waiting as wrangling and negotiations among the Government of National Unity partners take place, with some widely reported disagreements and sticking areas.<\/p>\n\n\n\n However, sentiment is quite bullish that the outcome of the talks will result in a fairly business-friendly and pro-reform government, which should unlock economic opportunities and growth.<\/p>\n\n\n\n The Department of Mineral Resources and Energy will publish the official fuel price adjustments for July in the coming week, before they come into effect on Wednesday, 3 July 2024.<\/p>\n\n\n\n
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