March is set to bring a temporary halt to the persistent rise in petrol and diesel prices seen throughout the year. According to month-end fuel price data, the consecutive increases in fuel prices will finally take a brief pause. This month might see a petrol price decrease to consumers.

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Factors Behind the Change

A combination of a weaker U.S. dollar and declining global oil prices has contributed to an improved fuel price outlook. Earlier in the month, the forecast appeared grim, but these economic shifts have slightly eased the pressure.

Despite this, the reduction in prices will be minor, with only 93 unleaded petrol showing a slight increase. All other fuel types will experience marginal declines.

March Petrol Price Decrease

The latest figures from the Central Energy Fund (CEF) provide insight into the final over- and under-recoveries influencing March’s fuel prices. These values are determined by international oil prices and the exchange rate between the rand and the U.S. dollar.

The projected changes for March’s fuel prices are as follows:

Petrol 93: Increase of 7 cents per litre
Petrol 95: Decrease of 7 cents per litre
Diesel 0.05% (wholesale): Decrease of 17 cents per litre
Diesel 0.005% (wholesale): Decrease of 22 cents per litre
Illuminating paraffin: Decrease of 6 cents per litre

Current Fuel Prices

Currently, 95 unleaded petrol is priced at R21.62 per litre at coastal areas and R22.45 inland, while 93 unleaded petrol costs R22.16 per litre.

Over the past few months, fuel prices have risen significantly. February saw both grades of petrol increase by 82 cents per litre, while diesel prices climbed between R1.01 and R1.05 per litre. These followed steady hikes of 12 to 19 cents in January, 17 cents in December, and 25 cents in November.

Key Drivers: Exchange Rate and Oil Prices

Fuel prices are largely influenced by fluctuations in international oil prices and the rand-dollar exchange rate. The recent dip in oil prices was driven by an unexpected surplus in U.S. fuel stockpiles, indicating lower demand. Additionally, ongoing discussions about a potential peace agreement between Russia and Ukraine have raised the possibility of lifting sanctions on Russian oil, further affecting market dynamics.

Brent crude oil prices dropped to nearly three-month lows, falling below $72 per barrel on February 26. However, oil prices had peaked at $77 earlier in the month, which limited the potential decline in fuel costs for March.

Investec chief economist Annabel Bishop noted that the rand’s movement is primarily influenced by global factors rather than domestic challenges such as budget delays or power shortages in South Africa. Despite these local issues, international market trends continue to play a more significant role in shaping fuel prices.

Official Price Announcement

The Department of Mineral Resources and Energy will officially announce the final fuel prices early next week, with the changes taking effect on Wednesday, March 5. The department has previously cautioned that daily CEF projections do not account for additional factors like slate levy adjustments or retail margin modifications, which may also influence the final pricing. While the upcoming fuel price adjustments offer some relief, the reductions remain minimal. Consumers should remain mindful of ongoing market fluctuations as global economic factors continue to impact fuel costs.