Big petrol price relief for South Africans – how much less you will pay for a tank

Petrol prices in South Africa will be cut by around R1 per litre from today, depending on the grade, while diesel prices will come down between 24 cents a litre and 30 cents a litre. 

This was announced by the Department of Mineral Resources and Energy late last night, revealing the official fuel price adjustments for July. 

The decline in fuel prices is largely due to the strengthening of the rand, which rallied on the back of the formation of a Government of National Unity and a new cabinet. 

However, this recovery has stalled in recent days due to a much stronger dollar on the back of economic data out of the US that indicates its interest rates may stay higher for longer. 

Global oil prices also declined slightly throughout June, thanks to subdued demand from the world’s major economies. 

This may prove to be shortlived, with US investment banks predicting oil consumption will pick up in the world’s largest economy in the coming months. 

These factors translate into the following adjustments to the types of fuel below –

• Petrol 93 decrease of R1.05 per litre
• Petrol 95 decrease of 99 cents per litre
• Diesel 0.05% decrease of 30 cents per litre 
• Diesel 0.005% decrease of 24 cents per litre

This should translate into lower inflation in the coming months, with July’s petrol price cuts adding to big cuts in June. 

Petrol prices came down by R1.24 per litre and between R1.09 and R1.19 per litre for diesel, translating to a 5% decline in prices. 

With over 85% of all goods in South Africa being transported via road at some point, the decline in fuel prices over the past two months will translate into lower headline inflation. 

While petrol price increases have kept overall inflation high, inflation in other consumer goods has eased substantially.

Over the past few months, the weighted average inflation for consumer goods such as clothing, footwear, furniture, appliances, and vehicles declined from 4.2% to 3.5%.

Contrary to intuition, Old Mutual chief economist Johann Els said that elevated petrol prices, having risen over 50% in the past two years, have a deflationary effect.

Higher petrol prices limit consumers’ disposable income, reducing their spending on other goods and reducing upward pressure on the prices of those goods.

Els said the Reserve Bank has likely already considered cutting interest rates, but this was delayed by the country’s elections and potential volatility in financial markets.

Successive petrol price cuts in June and July will further add to the downward pressure on inflation and interest rates.

How much less you are paying

According to calculations by BusinessTech, the average weighted petrol tank in South Africa is 60.4 litres. 

This was calculated by averaging the size of the petrol tanks of the most popular cars in South Africa based on sales data from Naamsa. 

The petrol tank sizes range from 37 litres for the Suzuki Swift and Toyota Starlet to 80 litres for the Toyota Hilux and Ford Ranger.

The weighted average revealed that the average petrol tank size for the top-selling vehicles in South Africa is 60.4 litres.

This means that, on average, South African motorists will save R63.58 per tank of petrol if they fill up with petrol 93. For a tank of petrol 95, the savings decrease to R57.62 per tank. 

The savings on South Africa’s top ten most popular vehicles can be seen in the table below.