South African drivers are poised for more welcome relief at the pumps next month, with early data pointing to potential price cuts of up to 57 cents per litre for petrol and 94 cents for diesel in June.
This would mark the fourth consecutive month of declining fuel prices, following May petrol and diesel reductions, as well as March and April’s significant cuts, though recent oil price increases could slightly reduce these gains by month-end.
Why prices are falling – for now
The Central Energy Fund’s early May projections show two key factors driving the downward trend:
- Stronger rand performance: Averaging R18.38/USD this month, up from April’s R18.83, lowering import costs.
- Lower global oil prices: Despite a recent rebound to $66/barrel, Brent crude remains below the $66.40 average that determined May’s prices.
“The decreases stem from both lower international oil prices and a firmer rand,” analysts emphasize.
Potential June price adjustments
| Fuel Type | Projected Decrease (per litre) |
|---|---|
| Petrol 93 | 40–57 cents |
| Petrol 95 | 40–56 cents |
| Diesel 0.05% | 75–94 cents |
| Illuminating Paraffin | 76–89 cents |
Note: If oil prices hold near current levels, the cuts could shrink to 15 cents (petrol) and 40 cents (diesel) by June’s final adjustment.
What’s driving oil’s rollercoaster?
- Trade deal optimism: Temporary easing of U.S.-China tariff tensions pushed prices up recently, but “the 90-day truce’s end could reignite volatility,” warns Joseph Dahrieh of Tickmill.
- Supply vs. Demand: OPEC+ continues pumping at elevated levels, while U.S. tariff policies have dampened global demand growth forecasts.
- Geopolitical wildcards: Iran nuclear talks and upcoming U.S.-UK trade deals could further sway markets.
Local impact: A gradual recovery
After May’s cuts (22 cents/litre for 95 ULP), inland petrol prices currently stand at:
- 93 ULP: R21.29 (just 17 cents above January’s price)
- Diesel 50ppm: Already down 41 cents this month.
Economist insights:
- Annabel Bishop (Investec): Expects the rand to hold steady amid anticipated U.S. rate cuts later this year, though local uncertainty keeps rates frozen for now.
- Oil Price Floor: Bloomberg analysts note Trump’s trade wars have created a “demand-side ceiling”, but OPEC+ supply decisions remain pivotal.
While the Fed’s cautious rate stance adds global uncertainty, South Africa’s fuel price recovery continues, with April–June reductions potentially totaling over R2/litre for diesel – building on March’s mixed adjustments.
What to watch:
- Final oil price and rand performance before the DMRE’s early June announcement.
- U.S.-China trade talks and OPEC+ supply hints in coming weeks.
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