Big turn for petrol prices in South Africa

The expected increase for petrol prices in March has declined in recent weeks, while diesel prices are set to be cut next month. 

This is predominantly due to a stronger rand, on average, over the past month and relatively flat oil prices as supply remains healthy. 

As a result, there is an outside chance that petrol prices may be cut in March for the first time since October 2024.

So far in February, the rand has held its own against a stronger dollar, with financial markets digesting the potential impact of US President Donald Trump’s trade policies. 

So far, there has been little tangible impact, with the reciprocal tariffs not being imposed but rather being used as a threat to gain concessions from trading partners. 

The Central Energy Fund tracks the global oil price and exchange rate fluctuations to forecast the expected changes to the fuel price in South Africa. 

Its data indicates the below changes for next week when fuel prices are adjusted in March –

• Petrol 93 – increase of 19 cents per litre
• Petrol 95 – increase of 6 cents per litre
• Diesel 0.05% – decrease of 4 cents per litre
• Diesel 0.005% – decrease of 11 cents per litre

Despite uncertainty about oil supply through the rest of the year, oil prices have remained relatively flat as the largest users have continued to steadily build their stockpiles. 

Brent crude has edged above $76 a barrel, also aided by a weaker dollar that makes commodities priced in the US currency more appealing to traders. 

Crude has risen this week on concerns about tighter supply as OPEC+ considers whether to postpone a production increase. 

Even with the increase over the past week, the price of oil has actually declined marginally over the past month, putting downward pressure on petrol and diesel prices. 

In the US, the industry-funded American Petroleum Institute reported a 3.3 million-barrel increase in commercial inventories last week. This eased fears of any significant disruption to supply. 

In contrast to oil prices, which have remained relatively stagnant since the start of the year, the rand has been extremely volatile. 

The rand has been under pressure since Trump won the US election in November 2024. His threat of tariffs ignited uncertainty in markets, sending investors flocking to the dollar for safety. 

However, the local currency has held its own largely due to the optimism surrounding South Africa’s future since the formation of the Government of National Unity (GNU). 

Furthermore, the rand has strengthened slightly due to a slowdown in US tariff applications and a moderation in the strength of the US dollar.

In recent days, the pressure has been put back on, with Trump announcing plans to implement a reciprocal tariff approach to global trade. 

This has been compounded by the uncertainty created by the postponement of the Finance Minister’s Budget Speech to 12 March. 

“There has not been agreement in terms of parties in the executive to actually find one another in proposals of the budget,” Speaker of Parliament Thokozile Didiza told lawmakers on 19 February. 

This postponement was brought about by widespread resistance among GNU members to a proposed 2% increase in VAT. 

The second-largest party in the GNU, the Democratic Alliance, said it would not vote in support of a Budget that contained tax hikes, effectively stalling its presentation.