Here is the expected petrol price for June – BusinessTech

South African motorists are lined up for some relief at the pumps next month, with mid-month data from the Central Energy Fund (CEF) pointing to price cuts across the board.

Petrol prices are currently showing an over-recovery of around 62 cents per liter, while diesel is showing a bigger potential cut at between 74 and 77 cents per liter.

These are the expected changes:

• Oil 93: decrease of 63 cents per liter
• Oil 95: decrease of 61 cents per liter
• Diesel 0.05% (wholesale): decrease of 74 cents per liter
• Diesel 0.005% (wholesale): decrease of 77 cents per liter
• Illuminating paraffin: decrease of 69 cents per liter

The CEF does not present daily snapshot data for LP Gas.

The Department of Mineral Resources and Energy (DMRE) has noted that its daily snapshots are not predictive and do not encompass other possible modifications, such as slate levy adjustments or retail margin changes.

The department determines these adjustments, considering various factors, at the end of the month.

Domestic fuel costs are primarily governed by the rand/dollar exchange rate and international oil prices. In South Africa, the fuel price is adjusted on the first Wednesday of every month based on these two factors.

For June, both oil prices and the rand/dollar exchange are serving the benefit of motorists, with both factors contributing to over-recoveries this month.

rand

The rand has enjoyed some relative strength in May, as tensions around the coming 2024 elections have eased and markets anticipate a more business-friendly result.

The local unit was under strain as some investors squirmed at the prospect of the ANC government potentially losing its majority and being forced to partner up with anti-business parties like the EFF or wildcards like Jacob Zuma’s MK Party.

However, most anxieties have settled with projections being ‘more of the same’ after the elections.

The other major factor hitting the rand is the global tone on interest rate cuts, which have been up and down based on sentiment out of the US Federal Reserve.

US interest rates are still expected to see the first cut in November, but markets are currently taking direction from changes in tone.

According to Investec chief economist, Annabel Bishop, the rand is likely to remain volatile but would strengthen on an earlier US rate cut and around 45% ANC voter support, with no ANC/EFF coalitions.

Today’s all-important US CPI data may create some volatility this afternoon as it provides fresh directional momentum to traders. A hotter-than-expected reading will likely put the rand under pressure.

Citadel Global director Bianca Botes said that data out of the US, particularly CPI data and retail sales—pointing to the health of consumers—will inform the tone of the Fed.

“A hotter-than-expected reading will likely put the rand under pressure,” she said.

Oil

Oil prices have risen marginally this week, pushing towards $83 a barrel after moving below $82 a barrel earlier in the month.

According to Bloomberg analysis, the advance came after an industry report showed shrinking US stockpiles, and traders looked ahead to a report from the International Energy Agency that may shed light on market balances in the second half of the year.

Prices have also gained due to oil-producing nations (OPEC+) curtailing output to prevent a glut and shore up global prices, as well as ongoing geopolitical tensions in the Middle East and Russia.

Despite these factors, oil prices are still relatively stable, and a far stretch from the $90+ a barrel seen earlier in the year amid warnings of a march to $100 a barrel.

This is how the mid-month prices could reflect at the pumps (diesel prices are wholesale and will differ at retail):

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