Big Swing in South Africa Fuel Prices: What Motorists Need to Know for March

South African motorists have reason to be cautiously optimistic as fuel price recoveries gain momentum. The latest data from the Central Energy Fund (CEF) indicates a notable shift, with petrol price increases easing and diesel prices heading for a cut in March.

Petrol and Diesel Price Adjustments

The most recent projections for the end of February show a significantly improved outlook compared to earlier forecasts. While petrol prices are still expected to rise, the under-recovery has dropped dramatically. Here’s what’s currently anticipated:

• Petrol 93: Increase of 18 cents per litre
• Petrol 95: Increase of 5 cents per litre
• Diesel 0.05% (wholesale): Decrease of 4 cents per litre
• Diesel 0.005% (wholesale): Decrease of 11 cents per litre
• Illuminating paraffin: Increase of 7 cents per litre

This turnaround is largely attributed to a relatively stable global oil market and a stronger rand, which has provided some relief for local fuel pricing.

What’s Driving These Changes?

Oil Prices and Market Volatility

Brent crude oil prices saw a 2% increase to over $76 a barrel this week, marking the largest jump since January. The global oil market remains uncertain, with multiple factors influencing price movements:

• Supply-side pressure: Rising US stockpiles suggest a potential oversupply, putting downward pressure on prices.
• Demand concerns: The ongoing US-China trade war and tariff discussions are dampening demand.
• OPEC+ strategies: Oil-producing nations are considering delaying production increases, which could drive prices higher.

The Rand’s Role in Fuel Pricing

The rand’s recent performance has played a crucial role in fuel price trends. While the local currency briefly weakened due to the postponement of South Africa’s Budget Speech, it managed to recover by week-end, benefiting from a weaker US dollar. A strong rand helps counterbalance rising global oil prices, limiting further fuel price hikes.

Political and Economic Influences on Fuel Prices

The delay of the 2025 Budget Speech from February 19 to March 12 has added another layer of uncertainty. The postponement stems from disagreements within the Government of National Unity (GNU) over a proposed VAT increase from 15% to 17%.

Finance Minister Enoch Godongwana has indicated that, should the VAT hike be scrapped, alternative revenue sources will need to be considered. This could include increases in fuel taxes, which would impact motorists later in the year.

What to Expect at the Pumps

With a week left in February, there’s still a chance for further shifts in fuel pricing trends. If the rand continues to strengthen and global oil prices remain stable, the current trajectory could improve further, potentially pushing 95 Petrol into over-recovery territory.

Motorists should stay informed as final fuel price adjustments will be announced by the Department of Mineral Resources and Energy (DMRE) before the start of March.

While petrol prices are still set to rise, the reduction in under-recovery is a welcome relief. Diesel users, in particular, can expect a slight price drop. However, long-term concerns over fuel taxes and economic uncertainty could bring further challenges.

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