South African motorists are set to enjoy more relief at the pumps as early data from the Central Energy Fund (CEF) indicates further decreases in petrol and diesel prices for April 2025.
If current market conditions hold and the National Treasury avoids introducing unexpected tax hikes, motorists could see petrol prices drop by up to 83 cents per litre and diesel by up to 79 cents per litre.
Early indicators show promising trends
Data from the first week of March points to a significant over-recovery in fuel prices, driven by a combination of lower global oil prices and a relatively stable rand/dollar exchange rate. The current projections are as follows:
- Petrol 93: Decrease of 70 cents per litre
- Petrol 95: Decrease of 73 cents per litre
- Diesel 0.05% (wholesale): Decrease of 76 cents per litre
- Diesel 0.005% (wholesale): Decrease of 79 cents per litre
- Illuminating paraffin: Decrease of 70 cents per litre
This follows a marginal decrease of 7 cents per litre for petrol and up to 23.5 cents per litre for diesel in March, marking the second consecutive month of price cuts.
Global oil prices drive the decline
The primary driver behind the over-recovery is the significant drop in global oil prices, which have fallen to under $70 a barrel in early March. This decline is largely attributed to US President Donald Trump’s tariff policies, which have sparked fears of a prolonged global trade war. The implementation of 25% tariffs on Canada and Mexico, followed by retaliatory measures, has shaken markets and reduced demand for oil.
At the time of reporting, Brent crude oil was trading at $69.55 a barrel, its lowest level in months. This has contributed 63 to 78 cents per litre to the over-recovery in fuel prices.
Rand stability offers neutral impact
While the rand has experienced volatility due to global trade uncertainties and domestic economic challenges, its impact on fuel prices has been neutral. The rand/dollar exchange rate currently shows a negligible under-recovery of 0.2 cents per litre. However, the rand’s relative stability has not offset the downward pressure on oil prices, allowing the over-recovery to persist.
Potential risks on the horizon
Despite the positive outlook, several factors could disrupt the current trend. The upcoming 2025 Budget, delayed to 12 March, remains a wildcard. Finance Minister Enoch Godongwana has warned of potential trade-offs to fund government plans, which could include hikes in the fuel levy or Road Accident Fund (RAF) levy. Any such adjustments, effective from 1 April, could erode the projected price decreases.
Additionally, further escalation in US trade policies or geopolitical tensions could impact both oil prices and the rand, potentially reversing the current over-recovery.
Relief for consumers
For now, South African motorists can look forward to some respite after months of rising fuel costs. The Department of Mineral Resources and Energy has already announced a marginal decrease in fuel prices for March, with petrol dropping by 7 cents per litre and diesel by up to 23.5 cents per litre. If the current trends continue, April could bring even greater relief.
Final price adjustments await confirmation
The final fuel price adjustments for April will be confirmed early next month, with new prices taking effect at midnight on Tuesday, April 1, 2025. Motorists are advised to keep an eye on market developments and budget announcements in the coming weeks.
As the saying goes, “Go easy on the accelerator until then, Mzansi.”
