As June 2024 approaches, South African motorists can look forward to potentially lower petrol and diesel prices, following a significant over-recovery in fuel costs and a notable decrease in global oil prices.
NOTE: The information contained in this article was adjusted to reflect CEF readings for Thursday, 23 May 2024.
Early petrol price forecast offers positive outlook for June 2024
CEF Data from late May 2024 shows significant over-recovery across all fuel types, suggesting potential reductions in fuel prices.
Petrol 95 ULP and Petrol 93 ULP & LRP demonstrated over-recoveries exceeding 160 cents per litre, indicating that the actual costs of fuel are currently lower than what consumers are paying.
Despite the positive domestic indicators, a recent surge in global oil prices could moderate the expected decreases.
Oil prices jumped by over 7% on the last day of May, with a barrel costing $82.01. This increase could dampen hopes for substantial drops in local fuel prices.
Here’s a closer look at the over/under-recovery rates, as of Thursday, 23 May 2024:
| Fuel type | Official | Adjustment on 30/05/2024 | Adjustment on 23/05/2024 | Adjustment on 16/05/2024 | Adjustment on 9/05/2024 | Adjustment on 2/05/2024 |
| Petrol 95 | TBA | +R1.62 | +R1.54 | +R1.33 | +R1.06 | +R0.84 |
| Petrol 93 | TBA | +R1.61 | +R1.47 | +R1.38 | +R1.11 | +R0.47 |
| Diesel 0.05% | TBA | +R0.98 | +R1.36 | +R1.34 | +R0.67 | +R0.92 |
| Diesel 0.005% | TBA | +R0.84 | +R1.06 | +R1.06 | +R0.60 | +R0.94 |
Motorists should prepare for a mixed impact on fuel prices.
While the domestic over-recovery would typically lead to price reductions, the spike in global oil prices may result in less significant decreases than initially expected.
Adjustments in local transport tariffs and changes in government-imposed levies also play a critical role in determining final fuel prices.
What goes into the final retail price of fuel in South Africa?
Determining the final retail price of petrol in South Africa relies heavily on the rand’s performance in currency markets and oil price movements.
Using this information, the CEF can formulate BFP estimates which, in essence, offer South African importers a snapshot into the cost of buying petrol from an international refinery, transporting the product and ensuring it against possible losses at sea and on land.
However, before the retail price of petrol is finalised at petrol stations, several additional costs are included in the BFP:
Government levies
- IP tracer levy (reimbursement to the oil industry for buying IP tracer dye and injecting it into IP to curtail the mixing of IP and diesel)
- General Fuel levy (tax levied by the government)
- Slate levy (to finance the cumulative under-recovery of the industry)
- RAF levy (to compensate for people involved in road crashes and accidents)
- Petroleum products levy (reimbursement to the pipeline users for the applicable NERSA tariff on transporting fuel through the pipeline)
Additional costs
- Wholesale margin (markup to the price of a product to account for wholesaling costs)
- Service cost recoveries
- Storage, handling and delivery costs
- Distribution costs
- Dealers margin (commission to the fuel pump dealers for retail operation)
- Zone differential (applicable to inland regions)
- Customs and excise duty
Monthly adjustments to fuel prices are made on the first Wednesday of each month based on these factors. The next changes will take effect on Wednesday, 5 June 2024.
Disclaimer: The petrol price forecasts provided in this article are based on speculative data and should be considered as such. The information has been sourced from the Central Energy Fund, and while we strive to present the most accurate and up-to-date information, Swisher Post does not guarantee the accuracy, completeness, or timeliness of the data. Prices can fluctuate due to a variety of factors beyond our control, including but not limited to changes in international oil prices, currency exchange rates, and government taxes. Therefore, Swisher Post shall not be held liable for any discrepancies or differences in the actual prices. Readers are advised to consult official sources for the most current petrol price information.
