Big petrol price cuts on the cards for South Africa next month

South African motorists are set for substantial relief at the pumps next month, with the latest data indicating large cuts to both petrol and diesel. 

This is largely a result of declining oil prices as fears of a global economic slowdown grow and geopolitical tensions ease. 

The rand has also held its own against the dollar over the past month, ensuring that declining oil prices will translate into cuts at the pump. 

South Africa’s Central Energy Fund tracks the fluctuations in international oil prices and the rand-dollar exchange rate to forecast expected changes in fuel prices in the country. 

Its latest data showed the following changes to petrol and diesel prices –

• Petrol 93 – decrease of 62 cents per litre
• Petrol 95 – decrease of 58 cents per litre
• Diesel 0.05% – decrease of 34 cents per litre
• Diesel 0.005% – decrease of 33 cents per litre

These expected declines have been driven by a sharp drop in oil prices over the last month, with Brent crude prices coming down by nearly 10%. 

This is due to a combination of rising supply and fears of declining demand as major economies slow, with China posting its slowest rate of quarterly economic growth in a year this month. 

China is particularly important for international oil prices as the country is the largest importer of the fuel, which is sourced mainly from the Middle East. 

As fears of economic slowdowns grow, oil supply appears to be increasing steadily as the Organisation for Petroleum Exporting Countries (OPEC) has largely removed its production caps. 

This removal of production caps has added millions of barrels to global oil supply at a time when tensions in the Middle East appear to be easing, removing a major threat to continued exports from the region. 

Bloomberg reports that the amount of crude oil on tankers at sea has risen to a record high in the past month as producers keep adding barrels. 

The International Energy Agency has projected a record oil surplus for next year as producers continue to ramp up supply, as demand appears to be weakening. 

As a result, oil prices have declined for three months in a row, with data showing that supply is growing at a rate three times faster than demand. 

In contrast, the rand has remained relatively flat over the past month against the dollar, despite the currency being highly volatile. 

The rand’s value remains largely determined by events outside of South Africa’s control, such as looming US Federal Reserve interest rate cuts, Chinese growth, and commodity prices. 

South Africa’s local currency has had a strong 2025 so far, with it strengthening by nearly 8% versus the dollar, despite global volatility and uncertainty hitting record highs. 

This ‘strength’ is largely a function of a weaker dollar and soaring commodity prices, with it having very little to do with local developments. 

The dollar may continue weakening as the US government shutdown appears to be prolonged, with little sign of a deal being secured.