Fuel prices FALL again! – But the rand has other plans…

Fuel

Cape Town – Following notable fuel price cuts in April — up to 72 cents for petrol and 86 cents for diesel — South African motorists can look forward to further decreases in May, according to mid- and late-April data from the Central Energy Fund (CEF).

However, the benefits are being limited by a weaker rand.

Projected Fuel Price Changes for May

  • Petrol 95: ↓21–30 cents per litre

  • Petrol 93: ↓18–30 cents per litre

  • Diesel (both grades): ↓38–50 cents per litre

  • Illuminating paraffin: ↓30 cents per litre

These reductions are driven by a global oil price slump, with Brent Crude dropping to around $64–$68 per barrel, down from over $71 previously.

The fall followed US President Donald Trump’s aggressive tariff policies, which initially crashed global markets before a partial reversal calmed things slightly.

According to reports, despite these global price gains, the rand’s depreciation — falling from R18.40 to around R18.93/$, after reaching a low of R19.69  —has significantly undercut potential savings.

Without this weakening, fuel prices could have dropped by 55 cents for petrol and 75 cents for diesel.

Local and Global Drivers

  • Global: The oil price dip was exacerbated by higher OPEC+ production and U.S.–China trade tensions. Tariffs on Chinese goods rose to 145%, likely curbing Chinese oil demand.

  • Local: Domestic political instability, especially tension within the Government of National Unity (GNU) over the 2025 budget and VAT hike to 15.5%, has kept the rand under pressure.

Economic Implications

  • The continued easing of fuel prices supports lower inflation, which dropped to 2.7% in March, the lowest since the COVID-19 pandemic.

  • If the downward trend in fuel prices continues, it could prompt the South African Reserve Bank (SARB) to consider a 25 basis point interest rate cut later in 2025.

Economists remain cautious, citing global volatility and the fragile local political climate, but acknowledge there’s room for a rate cut if the rand stabilises and inflation remains benign.

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