R3.49 per litre petrol price relief for South African motorists

South African motorists are saving over R3 per litre across all fuel types since the prices of petrol and diesel peaked in October 2023. 

This is a significant relief for motorists and the broader economy, with fuel prices being a major driver of inflation in recent years. 

Petrol prices rose sharply after the Russian invasion of Ukraine at the beginning of 2022, with the average price rising by over 50% by the end of 2023. 

Since then, prices have largely remained elevated due to a high oil price as tension in the MIddle East and production cuts from key oil-producers limited supply. 

These effects have largely been felt in the past four months, with successive cuts to the price of fuel in South Africa. 

The Organisation for Petroleum Exporting Countries (OPEC) has maintained production cuts for well over a year as its member states try to limit supply to drive up prices. 

However, this appears to be shifting in recent months as these countries have lost market share to big US producers, and some members break ranks to produce more to bolster state finances. 

This has been coupled with subdued demand, driving the price of oil down further.

Weak economic data out of China indicate that its growth is slowing, and fears of a US recession resulted in investors betting that oil demand would decline. 

As a result, the price of a barrel of oil has declined nearly 15% in the last six months. This has made fuel significantly cheaper in South Africa. 

There have also been positive local political developments, which have strengthened the rand and made it cheaper to import petroleum products. 

The formation of the Government of National Unity (GNU) following the country’s election has boosted investor sentiment towards South Africa. 

As money has flowed into local assets, the rand has strengthened by around 5% compared to the dollar. 

Positive local developments have also resulted in local assets being significantly more resilient in the face of external shocks in recent years. 

The relief is set to continue, with another big cut to the price of fuel expected in October. The Central Energy Fund’s data indicates prices may come down by over R1 per litre. 

Chinese and Indian diesel markets — which are the two largest oil import markets – are showing signs of a slowdown, with refining margins declining. That’s echoing trends in Europe, where futures hit the lowest since mid-2023 last week.

The rand also continues to strengthen despite remaining volatile. 

“The domestic currency has seen a substantial loss of political risk, which aided its appreciation towards R17.60/USD, from R20.00/USD earlier this year,” Investec chief economist Annabel Bishop noted.

“We expect the rand to continue to strengthen, averaging R17.70/USD in Q4.24, from an average of R18.00/USD in Q3.24, while 2025 sees the domestic currency continue to track stronger, towards R17.00/USD.”

She said the rand is expected to move towards R16.00/USD in 2026 as South Africa experiences faster growth and global risk-taking improves.

The significant reduction in the prices of all major fuel types since October 2023 is shown in the table below.

	October 2023 price (inland)	September 2024 price (inland)	Reduction
93 Petrol	R25.22	R21.79	R3.43
95 Petrol	R25.68	R22.19	R3.49
0.05% Diesel	R25.01	R19.59	R5.42
0.005% Diesel	R25.22	R19.69	R5.53