Fuel price drops in South Africa

Motorists, businesses and paraffin users will get welcome relief from July 1 as fuel prices fall sharply, driven by lower global oil prices and a stronger rand. The latest adjustment is expected to ease pressure on household budgets, transport costs and the broader cost of goods.

According to the Central Energy Fund, petrol and diesel prices will all decline significantly, with diesel seeing the biggest cuts. Petrol 93 octane will drop by R2.01 per litre, while petrol 95 octane will fall by R1.96 per litre.

Diesel users will also benefit from steep reductions. The price of 0.05% sulphur diesel will fall by R3.14 per litre, while 0.005% sulphur diesel will decrease by R3.59 per litre.

Paraffin users are set to receive the largest relief. Wholesale paraffin prices will fall by R5.23 per litre, while the Single Maximum National Retail Price will drop by R6.97 per litre. The cuts are expected to help lower-income households that rely on paraffin for heating and cooking.

There is one exception, however. LPGas, which is commonly used in homes for heating and cooking, will rise slightly by 16 cents per kilogram.

The Department of Mineral and Petroleum Resources, through the Central Energy Fund, said the main reason for the price cuts was a decline in international product prices during the review period from May 29 to June 25. Over that period, global prices for petrol, diesel and illuminating paraffin eased, helping reduce the basic fuel price locally.

A stronger rand also supported the downward adjustment. Since fuel is priced in US dollars on the international market, a firmer local currency reduces the cost of imports and helps soften price pressures at the pump.

Despite the relief, motorists will once again pay the full fuel levy after temporary support measures were phased out. That means the tax component returns to R4.29 per litre on petrol and R4.16 per litre on diesel.

A lower slate levy also helped reduce the final price. The levy dropped by R43.8 per litre, reflecting efforts to manage accumulated under-recoveries in the fuel pricing system.

The new pricing structure marks one of the more significant fuel reductions in recent months. For consumers, it offers some respite after a prolonged period of high fuel costs that had pushed up the prices of transport, food and other essentials.