By: IOL

South Africans can look forward to more fuel price relief from next Wednesday, May 7, but a volatile exchange rate has eaten into the potential savings.

Late month unaudited data from the Central Energy Fund (CEF) is pointing to petrol price reductions in the region of 20 cents per litre, while both grades of diesel are looking likely to drop by 38 cents.

This would cut the price of 95 Unleaded down to R20.63 at the coast and R21.42 in the inland regions, where 93 Unleaded could recede to R21.31.

April saw more substantial fuel price reductions, with 95 Unleaded falling by 72 cents and 93 ULP by 58 cents, while diesel dropped by between 84 cents (500ppm) and 86 cents (50ppm).

The primary driver behind May’s predicted fuel price cuts is lower international oil prices, with Brent Crude having dropped from $74 at the beginning of the April review period to around $64 at the time of writing, having spent most of the month around the $65 mark.

While this in itself could have led to more substantial fuel price cuts, a volatile South African rand has reduced the potential decreases by around 30 cents.

Although the local currency has bounced back from early month lows, when it broke through the $19 barrier around Donald Trump’s US tariff ‘D-Day’, the damage still shows in the fuel price numbers. The rand did bounce back following Trump’s 90-day reprieve and on April 30 it was trading at R18.64 to the greenback.

Keep in mind that the above predictions are based on unaudited data. The official fuel prices will be announced by the Department of Minerals and Energy early next week.

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