Fuel price set to drop in May as VAT hike kicks in

MOTORISTS in South Africa could expect to have some relief next month as a fuel price cut is on the cards on the back of easing global Brent crude oil price, benefitting consumers who will be facing the 0.5 percentage point VAT rate hike from 1 May.

- YOGASHEN PILLAY

The predicted petrol price drop in May would mark the third consecutive drop in fuel prices in 2025.

Old Mutual Group chief economist, Johann Els, on Friday said there has been an over-recovery on the petrol price of around 44 cents a litre.

“The weakness that we have seen in the rand over the last two weeks has been far overshadowed by the much lower oil price. So the rand price of a barrel of oil is down 16% since the beginning of April. That has led to the over-recovery in the petrol price,” Els said. He added that if conditions continued in the same direction, a fuel price cut of around 40 cents a litre was expected at the beginning of May.

“This is despite the weaker rand exchange rate that we have seen recently. The rand has since strengthened and stabilised from its weaker levels, which is good news for motorists and the economy,” Els said.