Fuel prices are set to drop significantly from 1 July, with petrol falling by up to R2.01 per litre and diesel by R3.14. (Photo: Dwayne Senior / Bloomberg via Getty Images) The costs for filling your tank up are set to fall at midnight in the wake of falling global oil prices and a stronger rand, bringing relief to motorists and applying the brakes to accelerating inflation.
The price for 93 grade for petrol will decline R2.01 a lite while 95 will drop R1.96, the Department of Mineral and Petroleum Resources said in a statement on Tuesday, 30 June. The diesel price will fall R3.14 a litre.
“The average Brent Crude oil price decreased from $104.59 to $86.53 during the period under review (June). This is due to the signing of the Memorandum of Understanding (MOU) between the US and Iran which has improved global supply outlook,” the department said.
The rand’s average exchange rate meanwhile appreciated to R16.38/dollar from R16.52/dlr over the period.
The fall in pump prices would have been steeper were it not for the fact that the short-term levy relief has now been phased out. On the other hand, the sharp hikes over the past three months would have been higher were it not for that measure. The full fuel levies are R4.29 per litre on petrol and R4.16 per litre on diesel.
Pre-Middle East conflict prices remain a long way off. Petrol prices from 1 July will be R5.80 more per litre than they were when the hikes began in April in the face of the Iran War launched by the US and Israel, while the diesel price is R6.89 per litre dearer.
Still, this round of price cuts will slow inflation’s upward trajectory and add to the case for the Reserve Bank to hold interest rates steady next month after the May CPI read was 4.5%, undershooting economists’ expectations that it would reach 5.0%.
Mineral and Petroleum Minister Gwede Mantashe on Tuesday morning was addressing the Central Committee of the National Union of Mineworkers (NUM), and announced the decreases to the gathering.
“When it is increasing it is because of war in the Middle East. When it is decreasing it is because we have decreased it,” he quipped to laughs and applause. DM