The Road Freight Association has welcomed the latest double-digit diesel price decrease, saying recent price drops are starting to relieve pressure on transporters in terms of business operating costs.
This comes after the latest tranche of fuel price decreases saw the price per litre of diesel (500ppm) and diesel (50ppm) decline by 21 cents and 19 cents respectively, while the price of both grades of petrol (93 and 95) decreased by 39 cents per litre. The CEF attributed the price cuts to an appreciating rand against the US dollar, which has directly led to lower basic fuel prices on petrol, diesel and illuminating paraffin.
“What does this mean? Transport costs are beginning to head south from the incredible highs seen during the year, but fuel prices are still 21.4% higher than what they were this time last year. We have a long way to go to bring the cost of logistics down to a far more palatable (and sustainable) level,” RFA CEO Gavin Kelly said.
“The realities of how transporters acquire diesel, how this is paid for, and the delays in being paid for the work done still remain true. There will be less pressure on the guarantees and daily refuelling cycles,” he said.
In a simple scenario, a truck with two 500-litre fuel tanks will now pay R820 less for every complete refuel (for 500ppm diesel). When this is multiplied by the number of vehicles and trips (refuels) a transporter has, the savings add up and release pressure on cash flow.
“Fuel was at the 41% mark in daily operating costs during the third quarter of the year, and now, as we head into the final month of 2025, this should head back below the 40% mark. That is extremely good news – but we need it to drop further,” Kelly said.
“The resultant downward pressure on transport prices will also begin to flow through the logistics supply chains. Some price relief to be felt by consumers will take longer than others – depending on stock on shelves at previous transport rates and the types of transport service contracts between clients and retailers,” he said.
Kelly added that continuous increases in the price of diesel had driven the cost of transport and logistics up to “unimaginable levels” and the recent decreases would take some time to be felt by consumers as the cost to transport goods slowly decreased.
“There will be some immediate consumer relief at retail points – however, as fuel continues to decrease in price, that effect will be felt by the consumer,” he said.
Consumers will pay less for goods – from fuel and food to clothing and electronic goods.
“As fuel prices start to fall, a domino effect will ensue, hopefully the first in a long line of such domino effects that will bring about a steady decrease in the cost of living as regards consumer items,” Kelly said.
“The bigger effect of falling fuel prices and retail prices is that the basket of goods used by the Reserve Bank to alter the repo rate will reflect a different picture of the inflation monster, and this will bring about a better financial experience for consumers,” he said.
Kelly said sustained fuel price reductions would have an effect on inflation, which was good news for everyone.
“This may not be as bountiful a festive season as in the past, but there are signs that things are going to get better. The recent GDP figures showed a better picture than expected, and the trend in fuel prices will definitely be a help to improve those figures too.”
