In a welcome but modest turn of events, lower international oil prices have improved the outlook for South Africa’s fuel prices in March, although the relief at the pumps is expected to be minimal.
According to late-month data from the Central Energy Fund (CEF), petrol is set to experience slight changes, with 95 Unleaded petrol expected to decrease by around two cents, while 93 Unleaded could see an increase of 11 cents. On the other hand, diesel prices are poised to drop by between 11 cents (500ppm) and 17 cents (50ppm).
While these adjustments will offer only a modest reprieve for South African consumers, the situation could improve in the coming days, as large over-recoveries are developing for all fuel types. The official fuel prices for March are expected to be announced early next week, with the new prices coming into effect on Wednesday, March 5.
As of now, 95 Unleaded petrol costs R21.62 at the coast and R22.45 inland, while 93 Unleaded is priced at R22.16. These figures follow a significant 82-cent price increase in February, with diesel rising by between R1.01 and R1.05.
This follows a series of price hikes over the past few months, including increases of 12 to 19 cents in January, 17 cents in December, and 25 cents in November.
The outlook for March is largely influenced by fluctuations in the global oil market. The price of Brent Crude oil hit near three-month lows this week, dipping below $72 (R1,329) on February 26. However, oil prices were higher earlier in the month, peaking at $77 on February 11, which has limited the extent of price relief for consumers next month.
The decline in oil prices this week is primarily due to an unexpected build in US fuel stockpiles caused by lower demand. There is also growing anticipation of a peace deal between Russia and Ukraine, which could lead to the lifting of sanctions on Russian oil and further exert downward pressure on global prices.
“If sanctions are lifted, additional Russian oil could enter the market, exerting downward pressure on prices in the short term,” explained Terence Hove, Financial Markets Strategist Consultant to Exness. “The market could also remain exposed over the longer term to US crude production policies, potential trade tensions, and OPEC policy changes. The resulting higher production and weaker global growth could drive market prices to the downside,” he added.
As South African motorists brace for the March price adjustments, it’s clear that international oil dynamics will continue to play a major role in shaping the country’s fuel price trajectory. Despite the slight relief for diesel users, petrol prices will remain volatile as global factors continue to influence the local market.
