Petrol price relief on the cards next week

South African motorists may experience some relief at the pumps next week as 95 octane petrol prices are set to come down alongside larger cuts to diesel prices, while 93 octane petrol may rise slightly. 

This is largely due to the oil price steadily declining throughout February, while the rand has held its own despite the Finance Minister’s Budget Speech being postponed to 12 March. 

The local currency is set to end February slightly stronger versus the dollar than it started as investors remain optimistic about South Africa’s economic future. 

Some investors may also think that the rand is trading below its fair value and is set to trend stronger throughout the rest of the year. 

The Central Energy Fund tracks these changes to forecast the expected changes to the price of petrol and diesel in South Africa for the coming month. 

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

• Petrol 93 – increase of 7 cents per litre
• Petrol 95 – decrease of 7 cents per litre
• Diesel 0.05% – decrease of 17 cents per litre
• Diesel 0.005% – decrease of 22 cents per litre

While the rand has held its own, even a marginally stronger currency would result in deeper cuts to fuel prices across the board as the oil price remains under pressure. 

The price of a barrel of Brent Crude has declined by 3.5% over the past month from $75.67 to $73.06, leading to much cheaper import costs. 

This is the biggest monthly decline since September 2024, as US President Donald Trump ratcheted up threats of tariffs against major trading partners. 

These threats hurt the appetite for risk and cloud the outlook for energy demand. Over the longer term, if tariffs are implemented, they will slow economic growth and pull down oil demand. 

Trump confirmed plans to place tariffs on imports from Canada and Mexico from the first week of March, including a possible 10% levy on Canadian oil. 

He also threatened to double an existing tariff on imports from China, the top crude importer. Beijing vowed countermeasures. 

An intensified trade war between the world’s two largest economies will hurt global growth and demand for oil, pushes prices downwards. 

There has also been apparent progress on a deal to bring the war in Ukraine to an end, which potentially indicates easing pressure on supply out of Russia.

The rand has strengthened by 1.13% versus the dollar over the past month despite shocks that have been expected to weaken the currency significantly. 

These shocks include the postponement of the Budget Speech, increased tension between South Africa and the US, as well as increased global uncertainty. 

The rand, however, managed to hold its own in February as investors continued to be optimistic about South Africa’s economic prospects. 

Nedbank chief economist Nicky Weimar said that investors are giving South Africa the benefit of the doubt, and now the country has to deliver. 

Prior to a period of weakening since Trump won the US election on 5 November 2024, the currency was unusually strong against the greenback as optimism surrounding the Government of National Unity (GNU) and a reduction in load-shedding.