R1.64 petrol price cut in 2024

South Africans are paying R1.64 less for a litre of petrol in December 2024 than they did at the start of the year.

At the start of 2024, motorists paid R22.79 for a litre of Petrol Unleaded 93. This was lower than the R25.22 they paid in October 2023.

Their joy was short-lived. The petrol price increased rapidly at the start of the year and reached R25.15 by May 2024, the month of South Africa’s general elections.

The positive election outcome, which resulted in the Government of National Unity (GNU), was good news for fuel prices.

The market reacted positively to the new government, and the rand strengthened significantly against the US Dollar.

Before the 2024 general elections, the rand regularly weakened to above R19.00 to the greenback. It hit R19.31 in February and R19.23 in April.

The positive sentiment after the elections helped the local currency to strengthen to R17.10 to the US Dollar by September.

Over this period, the Brent crude oil price also declined. It went from $91 per barrel in April 2024 to $69 per barrel in September 2024.

The stronger rand and lower oil price helped to reduce the price of Petrol Unleaded 93 to R20.73 per litre by October 2024.

That means that South African motorists paid R4.42 less for a litre of petrol in October 2024 than they did five months earlier.

However, a weaker rand over the last two months caused the petrol price to rise again, albeit not as fast as at the beginning of the year.

In November, the petrol price increased to R20.98 per litre and jumped by another 17c to R21.15 in December 2024.

Despite the slight increase over the last two months, South African motorists still pay R1.64 less for a litre of petrol than they did at the start of 2024.

The chart below shows the change in the price of Petrol Unleaded 93 inland over the last twelve months.

Petrol price changes planned

Despite the reduction in petrol and diesel prices in South Africa in 2024, it is still a constraint on the economy and pressure on household finances.

To address the problem, the government is reviewing how the fuel price is calculated in South Africa to identify how prices can be reduced.

In his Opening of Parliament Address in July, President Cyril Ramaphosa said the GNU would focus on reducing the prices of basic goods for South Africans.

This would include a comprehensive review of administered prices, particularly the fuel price formula.

In September, Mineral and Petroleum Resources Minister Gwede Mantashe reiterated the plan to review the fuel pricing formulae and make petrol and diesel more affordable.

How the formula will be changed to reduce petrol, diesel, and paraffin prices is unclear. However, it will likely include a reduction in levies.

During his 2024 Africa Oil Week Conference keynote address, Mantashe said petrol and diesel should cost R14 per litre.

“The price of fuel is part of the cost of living. When the fuel price goes up, the cost of living in South Africa increases. This is not good for society,” he said.

“The state must intervene to bring energy prices down in the interest of the South African community.”

The discussions include whether it is wise to include the fuel levy and road accident fund levy in the price of petrol and diesel.

Taxes and levies account for R6.18 of the price of a litre of petrol and R6.06 of the price of a litre of diesel.

These are only the taxes levied by the National Treasury, which include the General Fuel Levy (GFL), Road Accident Fund (RAF) Levy, and a carbon tax.

Mantashe said these distort the price of petrol and diesel in South Africa. He said that the discussions with the National Treasury would be concluded as soon as possible.