Petrol Price Drop Expected in May as Global Oil Prices Drop and Rand Stabilizes
South African motorists can finally breathe a sigh of relief as a welcome fuel price cut is expected in May 2025. This comes at a time when consumers are facing mounting pressure from a 0.5 percentage point VAT increase, effective from 1 May. The anticipated petrol price drop marks the third consecutive monthly decrease in fuel prices, driven largely by falling global oil prices and a stabilising rand-dollar exchange rate.
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Brent Crude Oil Price Plummets
Global Brent crude oil prices have seen a dramatic decline in recent weeks, falling from $81.30 per barrel three months ago to around $63.33 per barrel as of mid-April. This 22% plunge has created a significant over-recovery in fuel prices, which is expected to translate to noticeable savings at the pump.
According to Old Mutual’s chief economist Johann Els, the rand price of a barrel of oil is down 16% since early April, despite the local currency’s recent weakness. “The much lower oil price has overshadowed the weaker rand. If this trend continues, we could see a petrol price drop of approximately 40 cents a litre in May,” said Els.
Investec’s Annabel Bishop echoed this sentiment, noting that the oil price collapse, paired with recent rand gains, will cushion the impact on fuel prices.
Predicted Reductions in Fuel Prices
The Central Energy Fund’s (CEF) mid-month snapshot data shows promising reductions across various fuel types. For inland motorists, the expected petrol and diesel prices for May are as follows:
- 95 Unleaded Petrol: Down from R21.62 to R21.44 per litre
- 93 Unleaded Petrol: Down from R21.51 to R21.36 per litre
- Diesel 0.05% (wholesale): Down from R19.32 to R18.94 per litre
- Diesel 0.005% (wholesale): Down from R19.35 to R18.96 per litre
- Illuminating Paraffin: Down from R13.36 to R13.05 per litre
Coastal regions will see slightly lower prices:
- 95 Petrol: R20.83 → R20.65
- 93 Petrol: R20.72 → R20.57
- Diesel 0.05% (wholesale): R18.53 → R18.15
- Diesel 0.005% (wholesale): R18.59 → R18.20
- Illuminating Paraffin: R12.36 → R12.05
While these numbers are not yet final, they give a strong indication of what motorists can expect when the Department of Petroleum and Mineral Resources announces the official prices shortly before 1 May.
Trade Wars, Tariffs, and Their Impact on Oil
Much of the recent oil price drop can be attributed to the global trade war triggered by U.S. President Donald Trump. His decision to impose a 25% tariff on automotive exports and an additional 10% global tariff on 5 April has rattled global markets. Fears of a recession in the world’s largest economy have led to sharp declines in oil futures.
Bureau for Economic Research economist Tracey-Lee Solomon explained that OPEC+ also surprised markets by unwinding output cuts sooner than expected, increasing fears of a supply glut. “These factors have significantly lowered oil prices, benefitting importing countries like South Africa,” Solomon noted.
Rand Volatility: A Double-Edged Sword
While global oil prices have dropped, the rand has faced intense pressure due to both international and domestic political uncertainty. The currency hit a record low of R19.93/$ following a clash within the Government of National Unity (GNU), with the Democratic Alliance voting against the national budget over the VAT hike.
Despite this turbulence, weekend negotiations helped preserve the GNU-at least for now. The rand has since strengthened, falling back below R19/$, which has helped reduce the under-recovery in fuel prices.
Economists like Dawie Roodt and Waldo Krugell highlight that the impact of the weaker rand has been more than offset by the dramatic fall in oil prices, ensuring that fuel price reductions remain on the cards.
A Temporary Reprieve for South African Consumers
Although this fuel price cut comes as welcome news for South Africans grappling with rising living costs, the situation remains volatile. The final adjustment will depend on global oil markets, political developments, and currency performance in the days leading up to 1 May.
Nonetheless, the predicted fuel price drop-especially amid ongoing economic uncertainty and the VAT hike-offers some respite to stretched household budgets.
May 2025 brings good news for South African motorists as fuel prices are set to decline for the third month in a row. With Brent crude oil prices falling sharply and the rand showing signs of recovery, this cut couldn’t come at a better time. While it’s uncertain how long this relief will last, for now, consumers can look forward to saving a bit more at the pump.
