Sharp diesel price hikes are expected in September.
Image: Gemini
Steep fuel price increases are forecast for September, largely as a result of international oil prices remaining elevated due to the ongoing conflict in the Middle East.
Month-end data from the Central Energy Fund points to petrol price increases of around 96 cents for 93 Unleaded and R1.07 for 95 Unleaded.
Diesel prices are heading back in the direction of a full-blown crisis, with the CEF data indicating potential price hikes of around R2.71 for 500ppm and R2.92 for 50ppm.
Illuminating paraffin is looking set for an increase in the region of R2.12.
It's been a highly volatile year for fuel prices in South Africa, with the price of 95 Unleaded having increased from R19.47 to R24.71 between March and August, peaking at R27.19 in June. The wholesale price of diesel has risen from R17.70 in March to R25.30 in August, peaking at R30.30 in May.
Both grades of petrol decreased by 52 cents per litre at the beginning of August, while diesel increased by between R1.23 (50ppm) and R1.38 (500ppm).
Global oil markets have seen significant volatility since the US-Israeli war with Iran began in late February, with the critical Strait of Hormuz oil passage mostly shut to shipping traffic.
While the markets appear to have settled, with Brent crude oil trading mostly around the $90-per-barrel mark in August, down from highs of around $126 earlier in the year, prices remain well above pre-war levels of around $70.
Ole Hvalbye, commodities analyst at SEB, recently told Reuters: “A return to normal flows out of the Strait of Hormuz is now suddenly without any near-term hopes.”
On the upside, analysts do see a gradual softening of international oil prices, with JP Morgan predicting an average of around $86 for Brent in the third quarter of this year, falling to $80 in the fourth quarter and $78 in 2027.
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