South Africa

Driving on fumes? Cut in fuel prices still likely for June

fuel petrol diesel price june 2024

Judging by the latest projected figures for fuel prices in June, motorists could finally be saving a few pennies after four consecutive months of crippling petrol price increases.

The rand rallied this week to its strongest levels in 2024 due to an improvement in risk sentiment as bets grow that the US Federal Reserve may cut interest rates in September.

The projected reprieve for June fuel prices comes on the back of May’s fuel price hike which saw petrol prices breach the R25 per litre mark.

The price of both 93 and 95 Unleaded petrol increased on 1 May by 37c/litre, pushing the price of 93ULP to R25.15/litre and 95ULP to R25.49 .

Diesel prices, however, saw a drop of 30c/litre and 36c/ litre for 0.05% sulphur and 0.005% sulphur respectively.

June fuel price: Expected changes in petrol and diesel

The Central Energy Fund’s (CEF) latest unaudited data indicates an expected drop of around 61c/litre for 95 Unleaded petrol and around 63c/litre for 93 octane.

The wholesale price of diesel is expected to decrease by around 74c/litre and the price of illuminating paraffin by almost 69c/litre.

Main fuel price drivers: Rand/dollar, global oil prices

Fuel prices are adjusted on the first Wednesday of a month and are primarily determined by the international price of oil and the rand/dollar exchange rate.

The Automobile Association (AA) credited the current under-recovery in petrol and diesel prices on a strengthening rand and lower international oil prices.

“The expectant decreases are good news for consumers who have been battered and bruised by these prices in the last couple of months,” the association said in a statement.

With these expected decreases, the price of 95ULP will dip slightly to below the R25/litre mark, and the price of 93ULP will cost R24.52/litre.

“While fuel is still more expensive now than it was at the beginning of the year, these forecast decreases do offer some relief,” commented the AA.

  • At the time of writing on 17 May, the rand was trading at R18.17 against the US dollar
  • The price of Brent Crude Oil stood at $83.54 per barrel.

ALSO READ: May petrol price increase will hit consumers in many ways

Official fuel price: DMRE has the final say

As always, the latest data update comes with the caveat that it is still early in the month, and market conditions can swing before the Department of Mineral Resources and Energy (DMRE) makes the final announcement at the end of this month.

According to the department, the unaudited CEF snapshots are not predictive and do not cover other potential changes like slate levy adjustments or retail margin changes.

  • The official fuel price adjustments will come into effect on Wednesday, 5 June.

Stay tuned to The Citizen for more fuel price updates towards the end of this month.

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