Bad news about petrol prices next week

South Africa’s fuel prices have deteriorated once again, with the country now facing fuel price hikes of between R1 and R3 per litre this September.

New data from the Central Energy Fund (CEF) for the fourth week of August shows that petrol and diesel prices are set for a substantial under-recovery next week.

Petrol is now expected to increase by between 92c and R1.02 per litre, while diesel users will be hit with a massive hike of R2.83 to R3.04 per litre, depending on the fuel type.

These hikes are indicative of the unstable situation in the Middle East, as the petrol under-recovery has almost doubled compared to the CEF’s earlier data from mid-August.

On 15 August, the CEF estimated that petrol would be hiked by around 63c per litre. The diesel increase has been relatively consistent, though, as the previous projection was set at R2.73 per litre.

These are the CEF’s latest fuel price adjustment predictions as of the fourth week of August:

• Petrol 93 – increase of R0.92 per litre
• Petrol 95 – increase of R1.02 per litre
• Diesel 0.05% (wholesale) – increase of R2.83 per litre
• Diesel 0.005% (wholesale) – increase of R3.04 per litre

Note that these are not the official fuel price adjustments, which will only be confirmed by the Department of Mineral and Petroleum Resources in the first week of September.

The increase is predicated on the global oil price, which rose from $78 to $95 per barrel when the conflict in the Middle East flared up again this month.

However, prices have since dropped to $85 per barrel, leading to hopes that fuel prices may still improve before the official adjustments kick on next week Wednesday.

This is heavily dependent on how the war in Iran plays out. The United States is threatening to impose additional sanctions on Iran to force an economic end to the six-month war.

The Strait of Hormuz is still closed to general shipping, though Iran and Oman are in talks about a temporary transit corridor.

US President Donald Trump stated that the US Navy has removed all mines in the Strait, and threatened to destroy any Iranian ships placing new mines.

All of this has caused oil prices to fluctuate over the past two weeks, resulting in an under-recovery for petrol and diesel.

The following table shows how fuel prices will be affected in September, based on the current projections:

Petrol 93 price 31 July – 25 August

Petrol 95 price 31 July – 25 August

Diesel 0.05% price 31 July – 25 August

Diesel 0.005% price 31 July – 25 August