Motorists and consumers who rely on fuel for transport, business, and daily essentials will be pleased to learn that South Africa’s fuel prices are showing strong signs of decline in March 2025.
UPDATE: The Department of Mineral Resources and Energy released the final adjustments to fuel prices, coming into effect on Wednesday, 5 March 2025.
Latest fuel price outlook for March 2025
The latest data from the Central Energy Fund (CEF) indicates that all major fuel types, including petrol, diesel, and illuminating paraffin, are in over-recovery territory.
This means that consumers have been paying more than the actual cost of fuel in recent weeks, which opens the door for possible price cuts when the Department of Mineral Resources and Energy (DMRE) makes its official announcement at the end of the month.
Here’s a closer look at the over/under-recovery rates, as of Tuesday, 25 February 2025:
| Fuel type | Official | Adjustment on 25/02/2025 | Adjustment on 18/02/2025 | Adjustment on 11/02/2025 |
| Petrol 95 | +R0.07 | +R0.35 | +R0.09 | -R0.01 |
| Petrol 93 | +R0.07 | +R0.21 | -R0.06 | -R0.15 |
| Diesel 0.05% | +R0.18 | +R0.48 | +R0.35 | +R0.11 |
| Diesel 0.005% | +R0.24 | +R0.50 | +R0.40 | +R0.17 |
This shift in recoveries represents a notable improvement from last week, where some fuel types had smaller margins of over-recovery, while petrol 93 ULP was still under-recovered.
The change suggests that consumers could see lower prices across all fuel types in March, a welcomed relief after months of steady price hikes and market volatility.
The current over- and under-recovery figures provide insights into possible fuel price adjustments for March 2025:
What does this week’s data tell us about fuel prices in March 2025?
A week ago, there was uncertainty over whether fuel prices would decrease across the board in March.
While Petrol 95 ULP and diesel had already moved into over-recovery territory, Petrol 93 ULP was still under-recovered, making its price trajectory less predictable.
However, the latest data confirms that Petrol 93 ULP has now shifted into over-recovery, meaning that all major fuel types are tracking toward possible reductions.
The improvement is especially notable for Diesel 0.05% and 0.005% sulphur, where recoveries have strengthened from 35.045 cents per litre and 40.988 cents per litre last week to 48.076 cents per litre and 50.374 cents per litre this week, respectively. This suggests that diesel users—especially those in transport, logistics, and agriculture—could benefit from price cuts when the official adjustments are announced.
Illuminating paraffin, which is widely used for cooking and heating, also saw a significant jump in over-recovery, increasing by 15.177 cents per litre compared to last week. This indicates that households reliant on paraffin may experience lower costs next month.
For petrol users, the shift from last week’s over-recovery of 8.618 cents per litre for 95 ULP to 35.250 cents per litre this week further strengthens the case for a fuel price drop in March. Petrol 93 ULP, which last week had an under-recovery of 5.567 cents per litre, is now in over-recovery territory at 21.029 cents per litre, making the possibility of a price reduction far more likely.
The data, therefore, paints a positive outlook for March, with the strongest indications yet that motorists and consumers will see some relief at the pumps.
What’s driving this week’s price movements?
Several economic and market-related factors have contributed to the current over-recoveries, signalling a potentially favourable price adjustment in March:
1. International Oil Prices Have Stabilised
Global oil prices have remained relatively steady in the past week, trading at around $74.29 per barrel as of Monday, 24 February 2025. Market analysts point to expectations of resumed oil exports from Kurdistan as one of the reasons why supply levels have not tightened, keeping oil prices from spiking.
While geopolitical tensions remain a factor, the recent balance in oil supply and demand has reduced upward pressure on fuel prices, which has contributed to the over-recoveries seen in South Africa.
2. A Stronger Rand Against the US Dollar
The exchange rate plays a crucial role in determining how much South Africa pays for imported fuel. A weaker rand makes imports more expensive, while a stronger rand lowers costs.
In the past week, the rand has appreciated slightly, averaging R18.3865 per USD, making it cheaper to import fuel.
This, in turn, has contributed to the increasing over-recoveries, helping to cushion against potential price hikes.
3. Reduced Costs of Refined Fuel Products
Apart from crude oil prices, the cost of refined fuel products on the international market has also declined. This means that South Africa’s basic fuel price (BFP), which is a key factor in setting fuel prices, has seen reductions. Diesel and illuminating paraffin, in particular, have benefited from lower global refining costs, which explains their higher over-recoveries compared to last week.
The Department of Mineral Resources and Energy will confirm the final price adjustments at the end of February.
What goes into the final retail price of fuel in South Africa?
Determining the final retail price of petrol in South Africa relies heavily on the rand’s performance in currency markets and oil price movements.
Using this information, the CEF can formulate BFP estimates which, in essence, offer South African importers a snapshot into the cost of buying petrol from an international refinery, transporting the product and ensuring it against possible losses at sea and on land.
However, before the retail price of petrol is finalised at petrol stations, several additional costs are included in the BFP:
Government levies
- IP tracer levy (reimbursement to the oil industry for buying IP tracer dye and injecting it into IP to curtail the mixing of IP and diesel)
- General Fuel levy (tax levied by the government)
- Slate levy (to finance the cumulative under-recovery of the industry)
- RAF levy (to compensate for people involved in road crashes and accidents)
- Petroleum products levy (reimbursement to the pipeline users for the applicable NERSA tariff on transporting fuel through the pipeline)
Additional costs
- Wholesale margin (markup to the price of a product to account for wholesaling costs)
- Service cost recoveries
- Storage, handling and delivery costs
- Distribution costs
- Dealers margin (commission to the fuel pump dealers for retail operation)
- Zone differential (applicable to inland regions)
- Customs and excise duty
Disclaimer: The petrol price forecasts provided in this article are based on speculative data and should be considered as such. The information has been sourced from the Central Energy Fund, and while we strive to present the most accurate and up-to-date information, Swisher Post does not guarantee the accuracy, completeness, or timeliness of the data. Prices can fluctuate due to a variety of factors beyond our control, including but not limited to changes in international oil prices, currency exchange rates, and government taxes. Therefore, Swisher Post shall not be held liable for any discrepancies or differences in the actual prices. Readers are advised to consult official sources for the most current petrol price information.
