Drop a gear and disappear to the filling station before a steep hike in both petrol and diesel prices comes into effect at the pumps on Wednesday.
Janu-worry pain is set to continue for millions of motorists and commuters following the Department of Petroleum and Mineral Resources’ announcement of an increase of 82 cents per litre for both grades of unleaded petrol, and between R1.01 and R1.05 per litre for diesel.
This will translate in motorists having to cough up R22.41 per litre to fill up with 95 Unleaded petrol and R22.16 for Unleaded 93 when the official fuel price adjustments take effect on Wednesday, 5 February.
According to economists, the latest fuel price hikes are largely due to the weakening of the rand to the US dollar following US President Donald Trump’s announcement that he will cut all future funding to South Africa in reaction to the recently adopted Expropriation Act.
February fuel prices: Petrol, diesel and paraffin
The February hike in fuel prices marking the fourth consecutive month of increases, and the second increase for 2025.
- Petrol 93: Increase of 82 cents per litre
- Petrol 95: Increase of 82 cents per litre
- Diesel 0.05% (wholesale): Increase of R1.05 per litre
- Diesel 0.005% (wholesale): Increase of R1.01 per litre
- Illuminating paraffin: Increase of 97 cents per litre
Oil prices and ‘The Trump effect’ on rand/dollar exchange
Fuel prices are primarily determined by global oil prices and the rand/dollar exchange rate.
Rand/dollar
According to economists, the latest fuel price hikes are largely due to the weakening of the rand to the US dollar following US President Donald Trump’s announcement that he will cut all future funding to South Africa in reaction to the recently adopted Expropriation Act.
Crude oil
During the period under review, the average Brent Crude oil price increased from $72.78 to $77.41.
Contributing factors were:
- Increased demand due to cold weather in the Northern Hemisphere;
- Anticipated increase in demand for oil from China following economic stimulation policies;
- Supply was affected by OPEC+ decision to delay production increase until April 2025, as well as new sanctions against Russia and Iran which could further constrain supply and result in higher freight rates.
Crippling cost of living
Other than the increasing pain at the pumps, the cost of groceries is widely expected to be the biggest expense in consumers’ spending over the next year, but this could easily be usurped by the monthly electricity bill, when the Eskom tariff hike of 12.7% kicks in come April.
“Last year [2024] was one of toughest years yet for South Africans from all walks of life and this petrol price hike will simply serve to keep South Africans locked into a debt cycle that they have no escape from,” explained Neil Roets, CEO of Debt Rescue.
Rand/dollar exchange rate
The rand depreciated on average, against the US dollar (from 18.11 to 18.73 rand per USD) during the period under review when compared to the previous one. This led to higher contributions to the Basic Fuel Prices of petrol, diesel and Illuminating Paraffin by 36.85 c/l, 39.58 c/l and 38.61 cents per litre (c/l) respectively.
Slate levy
The cumulative slate amounted to a positive balance of R4.05 billion for petrol and diesel of at the end of December 2024.
In line with the provisions of the self-adjusting slate levy mechanism, a slate levy remains unchanged at zero cents per litre in the price structures of petrol and diesel.
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Another fuel price hike looming in March?
Economist Dawie Roodt warned that another increase could be on the cards for March.
“Unfortunately, looking at what the exchange rate of the rand has been doing the last couple of days, if the rand remains where it is at the moment, I’m afraid another increase can be expected next month,” he told SABC News.
“Of course, it’s another four weeks away still, but for now expect an increase of close to about a rand a litre.”
