The Department of Mineral and Petroleum Resources (DMPR) announced on 30 June that, effective 1 July, the wholesale price of diesel will decrease by R3,14/ℓ and R3,59/ℓ for 0,05% and 0,005% sulphur diesel, respectively, while 93- and 95-octane petrol will decrease by R2,01/ℓ and R1,96/ℓ, respectively.
The reductions come on the back of lower international oil prices and a stronger rand during the fuel price review period.
According to the DMPR, international crude oil prices retreated in June after a ceasefire agreement between the US and Iran eased concerns over supply disruptions through the Strait of Hormuz.
At the same time, the rand appreciated against the US dollar, further lowering South Africa’s fuel import costs. The average rand/US dollar exchange rate strengthened from around R16,52 during the previous review period to R16,38 between 29 May and 25 June, reducing the basic fuel price across petrol, diesel, and illuminating paraffin.
Despite these favourable market conditions, motorists and producers will not receive the full benefit of the fuel price relief. National Treasury has phased out the temporary fuel levy relief introduced earlier this year, reinstating the full fuel levy of 429c/ ℓ on petrol and 416c/ ℓ on diesel.
However, the Slate Levy, which is used to recover historical under-recoveries in the fuel price system, will decrease from 157,74c/ ℓ to 113,94c/ ℓ, providing some additional relief.
Impact on grain producers
Corné Louw, head of applied economics and member services at Grain SA, said the diesel price reduction is a particularly positive development for grain producers.
“The fall in the diesel price is very good news for farmers in the summer grain areas who are busy harvesting, as well as producers in the Western Cape who are fertilising or spraying winter grain crops,” he said.
“Diesel makes up about 13% of a grain and oilseed producer’s production costs. With harvesting now in full swing and grain being transported to silos, fuel represents a significant portion of producers’ operating expenses. A reduction of R3,59/ℓ will bring substantial relief.”
Inland pump prices will see 93-octane petrol decrease from R27,95/ℓ to R25,94/ℓ, while 95-octane will fall from R28,06/ℓ to R26,10/ℓ. Wholesale diesel prices will drop to R24,78/ℓ for 0,05% sulphur and R25,67/ℓ for 0,005%, with coastal prices will also declining acco
