South African motorists can look forward to some further relief at the pumps in September, as the Central Energy Fund (CEF) forecasts a significant drop in fuel prices. If current trends continue, this will mark the fourth consecutive month of price cuts, offering much-needed relief for consumers.
The CEF’s latest data points to an over-recovery in the prices of petrol and diesel, largely driven by declining global oil prices. This decline is attributed to concerns over a potential economic slowdown in the US, which has tempered the demand for oil. However, the stronger US dollar, bolstered by global uncertainty, has partially offset these lower prices.
According to the CEF, the following price changes are anticipated next month:
- Petrol 93: Decrease of 64 cents per litre
- Petrol 95: Decrease of 68 cents per litre
- Diesel (0.05%): Decrease of 59 cents per litre
- Diesel (0.005%): Decrease of 81 cents per litre
These expected reductions come on the back of successive declines in recent months, with motorists already paying significantly less for fuel. Over the past few months, the price of 93-octane petrol has dropped by R2.44 per litre, while 0.05% sulphur diesel has seen a decrease of R1.77 per litre.
However, the predicted cuts are not set in stone. Changes in the price of oil and fluctuations in the rand’s strength could influence the final prices announced at the end of the month. The oil market remains volatile, with fears of geopolitical tensions, such as a potential Iranian attack on Israel, causing temporary spikes in prices.
Read | How the GNU Reversed Fuel Price Hikes from Early 2024
On the other hand, concerns over a possible recession in the US and slower-than-expected growth in China are exerting downward pressure on oil prices. The Organisation for Petroleum Exporting Countries (OPEC) recently trimmed its forecast for global oil demand, citing fears of a global economic slowdown.
The rand has also experienced volatility in recent weeks, with its value swinging due to global financial market instability. However, Investec’s chief economist, Annabel Bishop, expects this volatility to ease, predicting that the rand will trade more steadily around R18.20 to the dollar. This would be a slight improvement from the R18.65/$ level seen last week.
As the rand remains susceptible to global shocks, the coming weeks will be crucial in determining the final fuel price adjustments. For now, South African motorists can remain hopeful for further relief at the pumps in September.
