Petrol and diesel prices are set to decrease significantly in July.
Image: AI / Sora
South African motorists and commuters can look forward to lower fuel prices from Wednesday, July 1, with significant decreases expected for both petrol and diesel.
This comes after a truce deal signed by the US and Iran earlier this month caused international oil prices to subside. While the truce appears increasingly fragile, with both sides having exchanged fire over the weekend, any further oil price movements won’t affect July’s fuel prices, although August is another story entirely.
Month-end data from the Central Energy Fund shows an over-recovery of R3.03 for 95 Unleaded petrol and R3.07 for 93 Unleaded, while diesel is even further in the green with over-recoveries of R4.67 for 500ppm and R5.12 for 50ppm.
However, the month of July sees the government’s temporary fuel tax relief programme coming to an end, after being halved in June, meaning that an additional R1.50 will need to be worked back into the fuel price as the General Fuel Levy reverts to the full R4.10 per litre.
This means the petrol price decrease for July could be limited to around R1.53, while the diesel relief could be reduced to between R3.17 and R3.62.
However, if the slate levy is reduced from its current level of R1.58 per litre, it could partially offset the return of the fuel tax. A prolonged decline in international oil prices would support such a reduction, as the levy is designed to compensate oil companies for price fluctuations in previous months.
Illuminating paraffin is looking set for a price decrease in the region of R5.23 per litre.
The official petrol and diesel fuel prices for July will be announced by the Department of Petroleum and Mineral Resources early this week.
Fuel price increases have taken a heavy toll on South African motorists and commuters this year. Since April, the cost of petrol has risen by R7.72 a litre, while diesel has surged by up to R10.16.
Currently, 95 Unleaded retails at R27.19 per litre at the coast and R28.06 in Gauteng, with 93 Unleaded selling for R27.95 inland.
Meanwhile, the wholesale price of 50ppm diesel stands at R27.88 at the coast and R28.75 inland.
Although fuel prices remain on course for another cut in July, the outlook beyond that has become far less certain. Renewed volatility in the Middle East over the weekend has raised the risk of higher international oil prices if tensions escalate or disrupt crude supplies. A sustained increase in oil prices, coupled with any weakening in the rand, could quickly reverse recent gains and place fresh upward pressure on South Africa's fuel prices in the months ahead.
IOL Motoring