As we approach June 2024, South African motorists have reason to anticipate potential reductions in the price of petrol and diesel, according to the latest data from the Central Energy Fund (CEF).
NOTE: The information contained in this article was adjusted to reflect CEF readings for Thursday, 9 May 2024.
Early petrol price forecast offers positive outlook for June 2024
Recent assessments reveal an over-recovery across all fuel types as of early May.
Specifically, petrol grades 95 and 93 showed an over-recovery of more than 100 cents per litre, which typically signals upcoming decreases in pump prices.
Here’s a closer look at the over/under-recovery rates, as of Thursday, 9 May 2024:
Fuel type | Official | Adjustment on 9/05/2024 | Adjustment on 2/05/2024 |
Petrol 95 | TBA | +R1.06 | +R0.84 |
Petrol 93 | TBA | +R1.11 | +R0.47 |
Diesel 0.05% | TBA | +R0.67 | +R0.92 |
Diesel 0.005% | TBA | +R0.60 | +R0.94 |
The over-recovery is supported by a downtrend in global oil prices, with a notable drop to $83.23 per barrel by Thursday, 9 May 2024. This decline, if sustained, could lead to lower import costs for South Africa, further contributing to the expected reduction in local petrol prices.
If the trend continues, motorists can expect to see a decrease in fuel costs come June.
This potential drop in prices comes as a relief, especially considering the recent fluctuations in global oil markets and the direct impact of these changes on fuel pricing.
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.