The freight and logistics sector will get some financial relief when fuel prices drop at midnight on Tuesday with both petrol and diesel costs returning to levels last seen in the first half of 2023.
The Department of Mineral resources announced the latest fuel price adjustments on Monday, which will see the price of unleaded petrol 93 and 95 dropping 92 cents per litre, bringing the price of petrol (95) to R22.19 per litre in Gauteng and R21.40 per litre along the coast.
Diesel, the lifeblood of the logistics industry, will take an even more substantial cut with the price of 0.005% sulphur diesel dropping by R1.05 per litre and the price of 0.05% sulphur diesel decreasing by 79 cents per litre.
The wholesale diesel price will drop to R19.59 per litre in Gauteng and to R18.80 per litre at coastal regions the lowest since June 2023. The wholesale price of illuminating paraffin will drop by R1.03 per litre.
The latest price adjustments are largely driven by a combination of falling international oil prices and a stronger rand. Over the past month, the average Brent crude oil price dropped from $83.55 per barrel to $78.54, driven by increased production from major oil-producing nations and expectations of impending interest rate cuts by the US Federal Reserve.
'The main contributing factors are the increased production from major oil-producing countries despite lower demand concerns, and the anticipated interest rate cuts by the US Federal Reserve,' the Department of Mineral Resources said in a statement.
Simultaneously, the rand strengthened against the dollar, improving from an average of R18.23/$ to R18.05/$.
This latest tranche of fuel price cuts offers some reprieve to the freight and logistics sector, where fuel costs have a direct impact on pricing and profitability.
For an industry that has been grappling with rising operational costs, this reduction in fuel prices could not come at a better time just ahead of the festive season.
The upcoming adjustment will take effect on Wednesday, 4 September.
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