Petrol prices in South Africa will come down by R1.24 per litre and between R1.09 and R1.19 per litre for diesel following a strong performance by the rand in May.

This will provide much needed relief for South African motorists and help ease inflation as the country has seen successive fuel price hikes so far in 2024. 

The overrecovery in the price of petrol and diesel for June is largely due to the strengthening of the rand versus the dollar. 

The changes in the price of various fuel types are shown below, as announced by the Department of Mineral Resources and Energy –

• Petrol 93 – decrease of 124 cents per litre
• Petrol 95 – decrease of 124 cents per litre
• Diesel 0.05% – decrease of 119 cents per litre
• Diesel 0.005% – decrease of 109 cents per litre

Oil prices over the last month have been relatively flat, rising only 0.43%, while the rand has strengthened around 4.5% versus the dollar. 

The rand has given up some of these gains due to election uncertainty, but not as much, and some people feared due to the possibility of a market-friendly ANC-DA coalition government. 

Reduced load-shedding has also boosted the rand as investors now expect an improved economic performance from South Africa in 2024. 

Stanlib chief economist Kevin Lings said good economic data out of China has also supported the rand’s rally in recent weeks. 

“It’s not as if China is doing fantastically well,” Lings said. “It’s just that at the end of last year, China seemed to be in significant trouble, but during the course of this year, they’ve initiated a number of reforms.”

The Chinese Communist Party’s reforms have made investors more confident in the world’s second-largest economy. 

Importantly, these reforms have also stimulated economic activity in China. As the world’s largest consumer of commodities, this has boosted the prices of raw materials. 

South Africa is still largely seen as a commodity-dependent economy, and the rand is a commodity-dependent currency. 

Thus, increased demand for the country’s commodities has boosted the currency as investors expect improved economic growth and foreign exchange earnings. 

Below are the prices for fuel in June compared to their prices in May.