Economists on Monday said they believed that motorists were in for some relief next month buoyed by a stronger rand and lower international oil prices, with a big cut in the petrol price predicted for April.
This will bring some reprieve to financially-constrained consumers after the South African Reserve Bank decided to leave interest rates unchanged at 7.5% per annum on the back of steadily rising inflation.
Old Mutual Group chief economist, Johann Els, on Monday forecast a petrol price cut of around 85 cents a litre for next week.
“At the moment, the daily recovery is running at 58 cents a litre. The running average for the month thus far is 87 cents per litre, because the daily is slightly lower than the running average the average will ease to around 85 cents a litre by the time the actual change is calculated,” Els said.
“This is still a big petrol price cut. International oil prices have also eased quite a bit at the start of the month. It will be good news for consumers down the line in the next few months. I expect that there will be more petrol price cuts.
“I believe that oil prices will improve from $72 a barrel to around $70 per barrel and the rand will be stronger in the few months, which will lead to further petrol price cuts.”
Efficient Group chief economist, Dawie Roodt, said he expected a relatively large decrease in the fuel price in April.
“I feel the decrease will be around 90 cents to R1 a litre. The international oil price has come down quite a lot recently, the rand has also behaved quite nicely and these combined two factors is why we are seeing a substantial decrease in the petrol price next week,” Roodt said.
“This is excellent news for South Africa, for inflation and for the motorists in the country. It will prevent inflation from rising much further, and in fact, I believe in two months' time the South African Reserve Bank could be in a position to cut interest rates.”
Waldo Krugell, an economics professor at North-West University, said South Africa was getting the benefit of a lower crude oil price and stronger rand-dollar exchange rate in March.
“According to Friday's numbers from the Central Energy Fund, there is a significant over-recovery of around 87 cents for petrol 95-octane and 96 cents for 0.005% diesel,” Krugell said.
“This means that if things stay on this course for this week there will be a sizable cut in fuel prices next month. That will be good for the inflation outlook too.”
Prof Bonke Dumisa, an independent economic analyst, said he also expected petrol and diesel prices to decrease from next week.
“Based on the current situation where there is average international Brent crude oil price per barrel, which was lower now in March 2025 compared to the average price in February and an average rand/dollar exchange rate, which is stronger now in March than what it was in February. I predict that both petrol and diesel prices will decrease in April next week,” he said.
Tracey-Lee Solomon, an economist from the Bureau for Economic Research, concurred that consumers can expect a decrease in petrol prices based on product prices and the exchange rate thus far in March.
“The rand has benefitted from a significantly weaker dollar, albeit not as much as other currencies. Oil prices have eased as global production increased and hopes grow for a resolution to the Russia-Ukraine war,” Solomon said.
“The proposed VAT hike announced by the National Treasury in the Budget Speech two weeks ago was a blow for already cash-strapped consumers. Any relief on essential expenses like fuel, which makes up a significant share of South Africans' budgets, will be welcome.”
Annabel Bishop, the chief economist at Investec, said that January and February saw the petrol price increases each of 12c/litre and 82c/litre, respectively, while March experienced a cut of -7c/litre.
“The drop in international petroleum product prices on lower oil prices now sees lower fuel prices for April,” she said.
BUSINESS REPORT