{"id":820049,"date":"2025-04-08T10:00:00","date_gmt":"2025-04-08T08:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=820049"},"modified":"2025-04-08T09:55:04","modified_gmt":"2025-04-08T07:55:04","slug":"warning-over-petrol-prices-in-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/trending\/820049\/warning-over-petrol-prices-in-south-africa\/","title":{"rendered":"Warning over petrol prices in South Africa"},"content":{"rendered":"\n

South African motorists can expect a month of wild swings when it comes to petrol price predictions for May as markets swing wildly and take in everything from global tariff wars to local political drama.<\/p>\n\n\n\n

However, economists warn that, should the Government of National Unity (GNU) fall apart, the scales will undoubtedly tip into bad news for pricing.<\/p>\n\n\n\n

This has been evident in significant fluctuations in the global oil price and pressure on the rand\/dollar exchange rate.<\/p>\n\n\n\n

These are the two biggest factors contributing to local fuel price recoveries, and both are currently at odds given recent developments.<\/p>\n\n\n\n

Oil prices are currently accounting for an over-recovery of between 16 and 52 cents per litre. The weak exchange rate, meanwhile, is contributing to an under-recovery of around 20 cents per litre.<\/p>\n\n\n\n

This is mixing things up for petrol prices in particular, which are currently showing flat recoveries. Diesel drivers are on better footing with the balance positive.<\/p>\n\n\n\n

If market conditions stay as they are\u2014which is unlikely given the volatility\u2014petrol prices would be flat in March, while diesel would be coming down by around 30 cents per litre.<\/p>\n\n\n\n

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Working in the favour of lower fuel prices in South Africa, global oil prices have weakened significantly since the start of the month, dropping below $65 a barrel.<\/p>\n\n\n\n

Oil prices hit a four-year low after US president Donald Trump launched a global tariff war, hitting key trading partners with tariffs ranging from 10% to 50% on imports.<\/p>\n\n\n\n

According to Bloomberg analysis, the tariff war has stoked concerns about a global slowdown or recession that would jeopardize energy demand. <\/p>\n\n\n\n

At the same time, OPEC+ delivered a bigger-than-expected output hike, hurting the outlook for oil-market balances.<\/p>\n\n\n\n

While prices have rebounded slightly as a calmer tone returned to global markets, futures are still much lower than in March, leading to a significant over-recovery in local pricing.<\/p>\n\n\n\n

Traders are keeping an eye on the market, as well as retaliation from economies like China, but overall, prices are weaker with both supply and demand supporting lower prices.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

Trump’s trade war has also had a significant impact on global currencies, with emerging markets in particular hit hard has money flowed into haven assets, decidedly risk-off.<\/p>\n\n\n\n

However, Trump’s salvo also carried the consequence of weakening the dollar as global recession fears took hole.<\/p>\n\n\n\n

According to Investec chief economist, Annabel Bishop, in a more typical South African environment, the weaker dollar would have seen the rand strengthen, likely pushing toward R17.50\/$.<\/p>\n\n\n\n

Unfortunately, South Africa is currently dealing with the fallout of a dramatic and twist-filled budget vote, where the Government of National Unity (GNU) split, causing a gaping divide between its two biggest parties, the ANC and the DA.<\/p>\n\n\n\n

The DA rejected the budget in parliament, voting against it, and the ANC shopped for votes to pass the budget outside the GNU.<\/p>\n\n\n\n

Both parties viewed the other’s actions as a betrayal.<\/p>\n\n\n\n

This has inserted a significant degree of uncertainty into the equation, with inter-party talks and negotions ongoing about the future of the GNU.<\/p>\n\n\n\n

This is putting pressure on the rand, keeping it above R19.30\/$ at a time it should have been getting a bit stronger.<\/p>\n\n\n\n

Bishop said that, should the DA exit the GNU or otherwise be given the boot, the rand will likely push to its worst levels on record, hitting about R21.00\/$.<\/p>\n\n\n\n

Should the GNU replace the party with more left-leaning opposition parties, the rand could weaken even further, she said.<\/p>\n\n\n\n

What this means for petrol prices is that the current rand weakeness is all but wiping out the fuel price recoveries delivered by the lower oil price.<\/p>\n\n\n\n

Should the worst-case scenario play out, “a weaker rand will raise fuel prices and the cost of living,” the economist warned.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"

Global tariff wars and South African GNU drama are putting markets in a spin, which means some wild swings for expected petrol and diesel prices leading up to next month.<\/p>\n","protected":false},"author":10,"featured_media":714644,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-820049","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-trending"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/820049","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=820049"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/820049\/revisions"}],"predecessor-version":[{"id":820077,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/820049\/revisions\/820077"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/714644"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=820049"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=820049"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=820049"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}