South African motorists and businesses are set to receive welcome relief at fuel stations from Wednesday, 3 September, as both diesel and petrol prices are expected to decrease significantly, according to month-end data from the Central Energy Fund (CEF).
The most substantial savings will come from diesel price reductions, with preliminary data indicating decreases of between 55 cents per litre for 500ppm diesel and 56 cents for 50ppm diesel. Petrol users will see more modest relief, with 95 Unleaded expected to drop by 4 cents per litre and 93 Unleaded by 12 cents per litre.
Fuel price projections for September
- Petrol 93: decrease of 12 cents per litre
- Petrol 95: decrease of 4 cents per litre
- Diesel 0.05% (wholesale): decrease of 55 cents per litre
- Diesel 0.005% (wholesale): decrease of 55 cents per litre
- Illuminating paraffin: decrease of 37 cents per litre
The anticipated fuel price adjustments are primarily attributed to international petroleum market movements, with the rand exchange rate playing a supporting role by contributing approximately 1.5 cents worth of relief to the pricing equation.
International diesel prices have experienced notable declines over the preceding month, largely due to rising global inventories, according to Bloomberg reports. This trend has provided the foundation for the significant diesel price reductions South African consumers are set to experience.
The diesel price reductions carry particular significance for South Africa’s broader economic landscape, given the critical role transport costs play in determining the prices of goods and services across all sectors. From food distribution to manufacturing supply chains, diesel costs directly impact the final prices consumers pay at retail outlets.
This development comes at a crucial time for inflation management. Consumer Price Inflation (CPI) accelerated to 3.5% in July from 3.0% in June, with food price inflation being the primary driver. However, diesel price increases of between 63 and 65 cents during that period also contributed to the inflationary pressure.
The fuel price adjustments occur against the backdrop of ongoing global economic uncertainties, including fluctuating oil prices, geopolitical tensions affecting energy markets, and varying currency exchange rates. South Africa’s fuel pricing mechanism, which adjusts monthly based on international prices and exchange rate movements, continues to reflect these global dynamics.
