May 2025 Fuel Prices To Fall Again. South African motorists and businesses are experiencing a notable reprieve as fuel prices continue their downward trend into May 2025. This marks the third consecutive month of reductions, offering much-needed relief amid ongoing economic challenges.
May 2025 Fuel Prices To Fall Again
Effective from 1 May 2025, the Department of Mineral Resources and Energy (DMRE) announced the following fuel price adjustments:
- Petrol 93 (ULP & LRP): Decrease of 85 cents per litre
- Petrol 95 (ULP & LRP): Decrease of 98 cents per litre
- Diesel (0.05% sulphur): Decrease of 86 cents per litre
- Diesel (0.005% sulphur): Decrease of 87 cents per litre
- Illuminating Paraffin (wholesale): Decrease of 82 cents per litre
- Maximum LPGas Retail Price: Decrease of 2 cents per kilogram
These reductions are attributed to a combination of declining international oil prices and a strengthening Rand. The average Brent Crude oil price decreased from $74.89 to $71.04 during the review period, influenced by continued supply from non-OPEC countries and anticipated increases from OPEC+ producers. Simultaneously, the Rand appreciated against the US Dollar, moving from R18.50 to R18.30, further contributing to the decrease in fuel prices.
Factors Influencing the Price Drop
Several key factors have contributed to the recent decline in fuel prices:
- International Crude Oil Prices: The global oil market has seen a surplus in supply, particularly from non-OPEC countries. This oversupply, coupled with moderate demand forecasts, has led to a decrease in Brent Crude oil prices.
- Strengthening of the Rand: The South African Rand has shown resilience against the US Dollar, appreciating from R18.50 to R18.30. This appreciation reduces the cost of importing fuel, directly impacting local fuel prices.
- Refinery Operations: Refinery shutdowns and maintenance in the US, in preparation for the switch to summer fuel grades, have influenced international petroleum product prices. While petrol prices saw slight increases due to these shutdowns, diesel prices followed the decreasing trend of crude oil.
- Slate Levy and Tracer Dye Levy Adjustments: The cumulative slate amounted to a positive balance of R2.29 billion for petrol and diesel at the end of January 2025. Consequently, the slate levy remains unchanged at zero cents per litre. Additionally, the Illuminating Paraffin Tracer Dye Levy has been decreased to 0.5 cents per litre, effective from 5 March 2025.
Impact on Consumers and the Economy
The reduction in fuel prices is expected to have a positive ripple effect across various sectors:
- Transportation Costs: Lower fuel prices reduce operational costs for public transport and logistics companies, potentially leading to lower fares and goods prices.
- Inflation: Fuel is a significant component of the Consumer Price Index (CPI). Decreases in fuel prices can contribute to lower inflation rates, improving the overall economic outlook.
- Consumer Spending: With reduced expenditure on fuel, consumers may have more disposable income, potentially boosting spending in other areas of the economy.
Conclusion
While the current trend is favorable, the fuel price outlook remains subject to global economic dynamics, including geopolitical tensions, OPEC+ production decisions, and currency fluctuations. The South African government continues to monitor these factors closely to make informed adjustments to fuel pricing structures
