Fuel Price Relief Expected in September 2025
Some Relief at Last: Fuel Prices Drop for the First Time Since June — What It Means for QFS Clients and the Market Forces Behind It.
South African motorists and businesses can expect some welcome relief at the pumps in September. Based on data from the Central Energy Fund (CEF) as of the third week of August, both petrol and diesel prices are projected to drop — with diesel seeing the more significant decline.
Here’s what the current mid-month outlook suggests:
- Petrol 93: Decrease of 14 cents per litre
- Petrol 95: Decrease of 6 cents per litre
- Diesel 0.05% (wholesale): Decrease of 51 cents per litre
- Diesel 0.005% (wholesale): Decrease of 52 cents per litre
This marks a notable improvement from earlier in the month, when a weaker rand limited the benefits of falling global oil prices. Now, a stabilised exchange rate and ongoing drops in international oil prices are contributing to a positive over-recovery in fuel prices — a trend that could continue if conditions hold.
Global Oil Markets: Pressure and Politics
The primary driver behind the expected price drop is the global oil market, where prices have fallen by approximately 10% year-to-date. In August, oil has been trading lower than in July, with Brent crude dipping to around $66 per barrel before rebounding to about $68 — still lower than last month, supporting the over-recovery in local fuel pricing.
However, geopolitical developments continue to influence market sentiment. U.S. trade policy, especially the looming increase in tariffs on Indian imports, has drawn attention to India’s continued purchases of Russian crude. White House adviser Peter Navarro has sharply criticised India, calling their oil trade with Russia a “profit-sharing scheme” rather than a supply necessity.
U.S. President Donald Trump is expected to double tariffs on Indian imports by 27 August, citing these ongoing transactions.
Despite this political pressure, Indian refiners have resumed Russian oil purchases following a temporary pause. Meanwhile, OPEC+ continues to ramp up production, and global demand remains tepid — adding to a broadly bearish outlook for oil markets in the coming months.
Rand Stability Offers Modest Support
The rand has shown unusual stability in August, trading within a narrow range of R17.60–R17.80 against the U.S. dollar. Despite a few fluctuations — driven by higher local inflation data and global risk aversion ahead of the U.S. Federal Reserve’s Jackson Hole symposium — the currency has remained relatively resilient.
By late August, the rand was trading around R17.72/$, contributing a marginal 0.3 cents per litre towards fuel price recoveries. This is a marked improvement from earlier in the month, when the currency’s impact was negative by around 20 cents per litre.
Market analysts note that the dollar’s recent strength, driven by expectations of prolonged higher U.S. interest rates, has kept global currencies in check. However, the rand’s limited reaction to both domestic and international events has helped create a more stable environment for fuel pricing calculations.
