After two months of petrol and diesel price reductions in South Africa, the outlook for May has taken a concerning turn. Early indications suggest that the brief reprieve experienced by motorists could come to an end as global market instability and a weakening rand begin to weigh heavily on the country’s fuel price trajectory. With the rand plunging beyond R19 to the US dollar, concerns have emerged about the sustainability of recent fuel price recoveries. Consumers who had just started to enjoy some breathing room are now facing the prospect of renewed financial strain at the pumps.
Key Takeaways
- Fuel Price Recovery at Risk: Following recent months of relief, early April data points to petrol under-recoveries and only slight diesel over-recoveries, signalling a possible turnaround in May fuel trends.
- Rand Weakness Driving Up Costs: The local currency’s fall beyond R19 to the dollar—driven by global trade tensions and domestic political uncertainty—is significantly undermining potential fuel price gains.
- Oil Price Drop Offers Limited Relief: Although global oil prices have declined due to increased supply and weaker demand, South African consumers are unlikely to benefit due to the rand’s poor performance.
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April Begins on Uneasy Ground
The opening week of April has already been marked by troubling developments, both globally and domestically. Internationally, escalating tensions in the United States’ trade policy—referred to as the renewed tariff war—have unsettled markets worldwide. These developments have disrupted global trade flows and contributed to growing economic anxiety.
Domestically, uncertainty surrounding the stability of South Africa’s Government of National Unity (GNU) has added further pressure to the rand. These combined factors have resulted in a highly volatile start to the month, casting doubt on any sustained recovery in fuel pricing. Analysts have pointed to this confluence of factors as a recipe for extended market turbulence, warning that any optimism around stable fuel pricing may be premature.
Current Fuel Price Trends: Mixed Movements
Preliminary data from the Central Energy Fund provides an early indication of where local fuel prices may be heading. For now, petrol prices are showing signs of under-recovery, ranging from 9 to 15 cents per litre depending on the grade. Diesel, on the other hand, has managed to remain in positive territory, reflecting an over-recovery of approximately 27 cents per litre.
Breakdown of early April indicators:
- Petrol 93: Projected increase of 15 cents per litre
- Petrol 95: Projected increase of 9 cents per litre
- Diesel 0.05% (wholesale): Projected decrease of 26 cents per litre
- Diesel 0.005% (wholesale): Projected decrease of 28 cents per litre
- Illuminating Paraffin: Projected decrease of 16 cents per litre
These figures are, however, subject to change depending on how market conditions evolve throughout the month. The split between petrol and diesel movement reflects deeper global dynamics—specifically, fluctuations in commercial freight demand versus personal transport use—creating uneven impacts across sectors.
Early Trends Suggest Continued Volatility
While early-month data is seldom sufficient to make definitive predictions about end-of-month fuel price adjustments, it often provides insight into potential pricing directions. When the month begins with significant over-recovery, it typically takes a considerable shift in market dynamics to reverse this into under-recovery. The same logic applies in reverse.
In cases where fuel pricing opens with mixed signals or recoveries hovering near zero, it usually suggests that substantial price volatility is ahead. Based on current data, April is beginning in a period of heightened instability, and a clearer view of May’s pricing will likely only emerge in the weeks to come. The lack of directional clarity in the early data is seen by some market participants as a red flag—signalling that even minor developments in global or domestic policy could cause sharp pricing swings.
Global Trade Turbulence Disrupts Oil Markets
Adding to the uncertainty is the introduction of new import tariffs by the United States government. In a sweeping move announced on 2 April 2025, the US implemented a standard 10% import tariff across the board, with several countries—deemed to have significant trade imbalances—facing even higher rates.
South Africa has been subjected to a 30% tariff under the new policy. Although several major South African exports, including gold and platinum, have been excluded from the tariff regime, the broader implications of increased trade tensions are still being felt. Markets have responded negatively, with fears of reduced global economic growth putting pressure on oil demand and price expectations. The mere prospect of a slowdown in global trade volumes has sent shockwaves through commodity markets, dragging investor sentiment and fuelling risk aversion.
Oil Output Increases Compound Downward Pressure
In a further development, oil-producing nations operating under the OPEC+ alliance have agreed to increase overall output. This has led to an oversupply of crude oil in the market, placing downward pressure on global oil prices.
The initial gains seen in early March have now been reversed, with crude oil futures falling below $69 per barrel. Under normal circumstances, a decrease in oil prices would benefit local fuel recovery figures. However, this positive effect has been negated by the concurrent weakening of the rand against the dollar. Traders are now caught between a rock and a hard place, as declining oil prices are effectively neutralised by worsening currency conditions.
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Rand Weakness Offsets Oil Price Drop
The average oil price for April remains higher than it was in early March, resulting in a mixed picture: petrol is facing minor under-recoveries—roughly five cents per litre—while diesel is showing stronger over-recoveries of up to 35 cents per litre. Yet, the rand’s performance has proven to be the more significant factor.
The combination of global financial uncertainty and domestic political instability has led to a sharp depreciation in the rand, which has now breached the R19 mark against the US dollar. This development has considerably dampened the potential for any positive recovery in petrol prices. Currency traders have warned that unless there is clear political direction from South African leadership, the rand could see further losses, placing additional strain on fuel prices in the coming months.
Political Uncertainty Adds to Market Jitters
The rand’s decline has been exacerbated by political tensions within the GNU. The Democratic Alliance (DA), which holds the position of the second-largest party in the coalition, recently broke ranks with other members by voting against the 2025 national budget in parliament. This move has cast serious doubt on the unity and future of the coalition government.
Although the African National Congress (ANC), the leading party within the GNU, managed to pass the budget by garnering support from parties outside the coalition, the rift between the two principal GNU partners has raised the prospect of political instability. Market participants are now watching closely to see what shape any future coalition might take, should the current one dissolve. The lack of cohesion at the highest levels of government is stoking investor fears, leading many to reprice risk in South African assets—including the currency.
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Conclusion
In light of these developments, the market outlook remains uncertain. The rand’s weakness and political instability, combined with unpredictable global trade policies and volatile oil prices, point to a turbulent month ahead. Fuel pricing for May will depend heavily on how these variables unfold in the coming weeks.
For now, motorists and analysts alike should brace for a potentially significant shift in fuel prices as South Africa navigates a complex mix of local and international challenges. Any hopes for price stability appear increasingly fragile, as the interconnected web of currency volatility, geopolitical risks, and coalition politics continues to cloud the horizon.
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