April Fuel Price Cut Brings Relief

Motorists are set to benefit from a notable drop in petrol prices next month, as economists predict a substantial reduction driven by a stronger rand and easing international oil prices.

On 24 March, several economists forecast a petrol price cut ranging between 85 cents and R1 per litre in April, offering some reprieve for financially constrained South African consumers. This follows the Reserve Bank’s recent decision to keep interest rates unchanged at 7.5% amid gradually rising inflation.

Old Mutual Group’s Chief Economist, Johann Els, expects a petrol price cut of around 85 cents per litre. “Currently, the daily recovery is 58 cents per litre, with the monthly average at 87 cents. I anticipate the final figure to settle around 85 cents,” he said. “This remains a significant reduction, and if oil prices continue easing and the rand strengthens, we could see further cuts in the coming months.”

Els added that Brent crude oil is likely to settle around $70 per barrel, contributing to the positive fuel price outlook.

Efficient Group’s Chief Economist, Dawie Roodt, echoed the optimism, estimating a reduction of between 90 cents and R1 per litre. “Both the declining international oil price and the improving rand have contributed to this anticipated decrease. It’s excellent news for inflation and for motorists.”

Waldo Krugell, an economics professor at North-West University, said the Central Energy Fund’s data showed an over-recovery of 87 cents for 95-octane petrol and 96 cents for diesel. “If the trend holds, we’ll see a sizeable cut next month, which bodes well for inflation expectations.”

Independent economist Prof Bonke Dumisa agreed, stating that March’s lower oil price and stronger rand compared to February support the case for price cuts in both petrol and diesel.

Tracey-Lee Solomon from the Bureau for Economic Research noted that global oil prices had eased due to increased production and hopes for a Russia-Ukraine resolution. “The rand’s relative strength, coupled with declining product prices, means consumers can expect a welcome break.”

Annabel Bishop, Investec’s Chief Economist, said the fuel price drop in April follows previous changes: “January and February saw increases of 12c and 82c respectively, while March delivered a minor cut of 7c. With petroleum product prices now falling, April brings long-awaited relief.”