Further fuel price cuts could be on the cards for South Africa.
Image: Armand Hough / Independent Media.
Global recession is on the lips of many economists as stock markets continue to crash this week amid the intensified global trade war sparked by Donald Trump’s ‘Liberation Day’ tariffs.
On Wednesday the world was bracing for even more market turmoil after the US hit China with 104% tariffs following the latter’s counter-measures to Trump’s initial 34% levy threat.
These global events, in tandem with uncertainty surrounding the future of South Africa’s Government of National Unity (GNU), have seen the rand plummet by 7% since the beginning of April.
On Wednesday, the local currency was trading at R19.65, having depreciated from R18.36 at the beginning of the month, just before Trump's tariff announcements and the subsequent retaliations sent markets into a free-fall.
This has dire implications for inflation in South Africa, with prices of imported goods set to increase if the local currency does not bounce back from its current two-year lows.
Thankfully, the bad news does not extend to the fuel price.
The same global market rout that affected the rand has also seen international oil prices fall by a significant margin.
The price of Brent Crude oil has fallen by 18% since the start of April, from US $74.50 to $61.09 on April 9.
Although the current volatility makes it impossible to make an accurate fuel price prediction for May, current indications are that a small decrease could be on the cards for both petrol and diesel.
The latest snapshot from the Central Energy Fund shows a small over-recovery of about four cents per litre for 95 Unleaded petrol, but the most recent daily data implies that this could grow further if current trends persist. Indications are currently pointing towards decreases of around 30 cents for diesel.
This will follow petrol price decreases of between 58 cents (93 Unleaded) and 72 cents (95 Unleaded) announced at the beginning of April and diesel price cuts of 84 cents (500ppm) and 86 cents (50ppm). This brought fuel prices back down to January's levels.
95 Unleaded petrol currently retails at R20.83 at the coast and R21.62 in Gauteng, where the cheaper 93 Unleaded costs R21.51.
Any further relief, though difficult to predict at present, will be welcome news for consumers, given the other inflationary pain that the weaker rand is likely to cause.
IOL
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