As oil hits 2-year high, here’s the outlook for SA's petrol, diesel prices next month

accreditation
0:00
play article
Subscribers can listen to this article
Fuel prices are adjusted by the Department of Mineral Resources and Energy on the first Wednesday of every month. (Pixabay)
Fuel prices are adjusted by the Department of Mineral Resources and Energy on the first Wednesday of every month. (Pixabay)

South Africans could be due another small petrol price cut in the first week of July – but that could be wiped out if the oil price continues its current run.

With more than two weeks still to go before the July fuel prices are fixed, the Automobile Association (AA) released its mid-month fuel price forecast on Tuesday, based on information from the Central Energy Fund.

Petrol and diesel prices are largely determined by the oil price, as well as rand strength – given that SA must buy oil in dollar.

Fuel prices are adjusted by the Department of Mineral Resources and Energy on the first Wednesday of every month.

Earlier on Tuesday, the Brent Crude oil price reached $73.64 (around R1 014) a barrel, the highest level since April 2019. Oil prices have been climbing amid expectations that global demand may return to pre-pandemic levels more quickly than previously anticipated.

"So far, we’ve seen some quite sharp increases in the landed prices of fuel this month, especially for diesel. This has come somewhat unexpectedly after the long decline in the basic fuel price throughout May," says the AA.

The AA is forecasting a six-cents-a-litre decrease for petrol. The picture for diesel is less rosy and is showing an increase of around 20 cents a litre, with a 14-cents-a-litre increase for illuminating paraffin when prices are adjusted for July.

"However, these forecasts could all change by month-end, as the rand looks to be flattening out while international oil prices are on an upward climb. Much as we hope for the current picture to continue, South Africa might well be looking at across-the-board fuel price increases for July," it concludes.

The rand started the month at around R13.70/$ - strengthening to closer to R13.40 earlier in June. But it was last trading around R13.78 on Tuesday afternoon.

In the first week of June, both unleaded 95 petrol (R17.13 per litre), and unleaded 93 (R16.91) were cut by ten cents per litre.

Diesel (0.05% sulphur) was be hiked by 20 cents per litre and diesel (0.005% sulphur) increased by 21 cents per litre.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
14.79
+0.4%
Rand - Pound
20.35
+0.3%
Rand - Euro
17.41
+0.4%
Rand - Aus dollar
10.89
+0.4%
Rand - Yen
0.13
+0.3%
Gold
1,802.28
0.0%
Silver
25.18
0.0%
Palladium
2,675.50
0.0%
Platinum
1,064.50
0.0%
Brent Crude
74.10
+0.4%
Top 40
61,933
+1.0%
All Share
68,064
+1.0%
Resource 10
66,904
+1.5%
Industrial 25
89,442
+0.7%
Financial 15
12,820
+1.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Voting Booth
In light of the recent looting, do you think a basic income grant is the right approach to deal with SA’s hunger and poverty problems?
Please select an option Oops! Something went wrong, please try again later.
Results
It will go a long way in helping fight the symptoms of SA’s entrenched inequality, especially for those who are starving right now
20% - 1285 votes
SA’s problems are complex, and we instead need to spend that money on building and growing our economy, which will help the country in the long run
31% - 2037 votes
All grants are a problem as they foster a reliance on handouts
49% - 3232 votes
Vote