By Anita Dangazele
- A peace deal between the US and Iran sent global oil prices crashing more than 4% on Monday, pushing South Africa toward a fuel price cut next month.
- Petrol is tracking a drop of more than R2 a litre in July, saving a taxi owner roughly R128 on a 50-litre fill, but fare cuts are not guaranteed.
If you take a taxi to work every day, you already know how this goes.
Fuel prices go up and your fare goes up with them. Fuel prices come down and your fare stays exactly where it is.
Petrol is heading down. The question is whether you will feel it.
The US and Iran struck a peace deal on Sunday, ending three months of fighting that had pushed oil prices sharply higher around the world. Global oil prices dropped more than 4% on Monday. That is a big move in a single day.
South Africa’s fuel price is calculated every month using international oil prices and the rand-dollar exchange rate. The numbers that feed into next month’s calculation have been building toward a cut for weeks. Petrol 95 is currently tracking a drop of more than R2 a litre for July. Diesel is tracking an even bigger cut.
Monday’s oil price crash had not yet been added to that calculation, which means the final figure could be larger.
On a 50-litre tank, a R2 cut saves a taxi owner around R128 each fill. A minibus taxi that fills up several times a week would save several hundred rands a month.
Whether that saving reaches the person in the back seat depends on the operator. Taxi fares are set route by route across the country. There is no guarantee that a cut at the pump will mean a cut in what you pay to get to work.
The peace deal was confirmed by US President Donald Trump on Sunday. Iran said it brought an immediate end to the fighting. A formal signing is scheduled in Switzerland on 19 June. The Strait of Hormuz, a narrow shipping channel that carries roughly a fifth of the world’s oil, had been closed since the conflict began in February. It is now set to reopen.
The official July fuel price adjustment will be announced by the government at the end of June.
Pictured above: An empty fuel station.
Image source: File
