How South Africa’s fuel prices fluctuated in 2024, and what 2025 is likely to bring

Although 2024 was by no means the most tumultuous year for fuel prices in South Africa, motorists did endure something of a price rollercoaster, albeit culminating in lower prices during the latter half.

95 Unleaded petrol in the coastal regions started the year off at R21.77, and ended off at R20.68, while 93 Unleaded in Gauteng shifted downwards from R22.17 to R21.15.

But it was a year of highs and lows for petrol, with coastal 95 Unleaded having peaked at R24.70 at the beginning of May following four consecutive increases. The largest of these was in March, when petrol was hiked by R1.21.

This was followed by five straight months of price reductions, which saw the price of 95 ULP drop to R20.26 at the beginning of October, before rising by 25 cents in November. The most significant month-on-month decrease during this period was R1.24 in June.

Diesel, which has an effect on general inflation, rode a similar rollercoaster in 2024, with the wholesale coastal price of 50ppm starting the year off at R20.02 and ending at R18.50. Prices hit a high of R21.93 in March and a low of R17.81 in October, before rising by 20 cents in November and 50 cents in December. Its biggest month-on-month increase was by R1.19 in March while the most substantial decrease was R1.12 in October.

The lower fuel prices during the second half of 2024 were driven by a combination of lower international oil prices and a stronger rand, the latter having strengthened due to positive sentiment surrounding South Africa’s Government of National Unity (GNU), following the late May national elections.

Although 2024 was a relatively volatile year for local fuel prices, it was by no means the height of fuel price pain for South Africans

95 Unleaded reached an all time high in July 2022, when it cost R26.09 at the coast and R26.74 in Gauteng. While South Africans still feel uncomfortable paying over R20 for a litre of petrol, it is currently R5 less expensive than it was at its peak two and a half years back.

Looking at the five year picture, however, petrol hit a low of R11.52 in May 2020, while most of the world was in lockdown and oil prices had fallen below $20 per barrel as a result of plummeting demand. 

Petrol hovered around the R15 mark for much of 2018 and 2019, but the last time it fell below R10 was in September 2011.

Where are fuel prices heading in 2025?

As mentioned, fuel prices fluctuations are primarily determined by movements in the local currency and international oil markets.

Any shocks, particularly international conflicts, can lead to a spike in oil prices while economic recessions can see prices falling.

As it stands, and assuming there are no unwelcome occurrences, 2025 looks to be a relatively stable year for international oil prices. 

A survey of 41 economists and analysts, conducted by Reuters in late November, predicts that Brent Crude oil will average $74.53 in 2025 (R1,345), which is not far above the November level of $73 that determined South Africa’s current fuel prices.

In fact the World Bank’s latest Commodity Markets Outlook predicts that Brent will average around $73 per barrel in 2025, down from $80 this year, assuming that the current conflict in the Middle East does not intensify.

An escalation might theoretically cut global oil supply by 2%, which could see prices spiking at around $92, before settling back at $84 once unaffected producers hiked production.

The softer oil price outlook comes as global oil supply is expected to exceed demand by an average of 1.2 million barrels per day. This is partly due to a slowdown in industrial production in China as well as increased demand for electric vehicles in that region.

Notwithstanding any international conflicts that could push oil prices up, the rand remains a risk for local fuel prices, having pushed past the $18 mark in November following Donald Trump’s US election victory and the economic policy uncertainty surrounding that. South Africa’s Mid-Term Budget Speech also put pressure on the local currency, with wider budget deficits and higher debt forecast over the next three years.

As it stands, however, the most likely scenario is for relative fuel price stability for South Africa in 2025, with prices likely to remain similar to current levels for the foreseeable future.

It also remains to be seen whether the government makes good on the promise it made, at the opening of Parliament in July, to review South Africa’s current fuel price structure. 

This would help to determine whether all components are properly calculated and still necessary in the current structure.

In addition to transportation, storage, wholesale and retail-related costs, South Africa’s fuel price structure comes with a heavy tax burden of R6.14 for every litre of petrol and R6.02 for each litre of diesel sold. This consists of the General Fuel Levy, at R3.96 for petrol and R3.84 for diesel, as well as the Road Accident Fund (RAF) levy that’s pegged at R2.18.

“While we are cautious about simply scrapping these levies outright, we believe there is room for movement in specifically the RAF levy portion of the taxes,” the Automobile Association said at the time.

IOL