Even bigger fuel price cut likely in July

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fuel price

Johannesburg – After enjoying a fuel price reduction of 25 cents a litre in early June, South African motorists could be in for an even more substantial price cut at the beginning of July.

Unaudited mid-month data, released by the Department of Energy, is pointing towards a price reduction of around 60 cents for petrol and 59c in the case of diesel.

This would bring the cost of a litre of 95-octane Unleaded down to R12.46 at the coast and R12.95 in Gauteng (with 93 Unleaded at R12.73).

The 59 cent calculation is based on international fuel prices between June 2 and June 14, and July’s final fuel price will also be determined by oil price price and rand movements between now and June 29.

Since the start of June 2017, petrol prices have dropped by 25 cents. As claimed by the Department of Energy, next month’s expected ‘lower’ fuel prices will see:

  • In Gauteng, the price of ULP and LRP can decline by 59.2 cents per litre
  • Diesel with 0.005% sulfur can cut by 59.6 cents per litre

But, why all of a sudden?

In economist Fanie Brink’s opinion, the slash in fuel prices might be due to a fall in crude oil prices to $47 per barrel. Furthermore, strongly withstanding the exchange rate against other currencies, petrol prices can reduce by 3.4 cents per litre, while diesel prices can reduce by 3.3 cents per litre.

Both the local currency and oil prices have been working in our favour so far this month.

The rand has strengthened from R13.06 at the beginning of June, to a peak of R12.70 on June 5, and settling in the R12.75-80 range by mid-month.

Oil prices have trended lower this month on rising US supplies.

Here’s what you can expect to pay:

 

Fuel June Official July Expected
93 Petrol R13.32 R12.73
95 Petrol R13.54 R12.95
0.05% Diesel (Wholesale) R11.58 R10.98
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