South African motorists could face significant fuel price increases in August after the petrol over-recovery recorded in July was wiped out, while diesel prices have moved deeper into under-recovery.
The latest month-end data from the Central Energy Fund (CEF) shows that the over-recovery on Petrol 95 has reversed into an under-recovery, while the over-recovery on Petrol 93 has narrowed to just 5 cents per litre.
Diesel prices have been hit even harder, with current data pointing to increases of between R1.75 and R1.90 per litre from next week.
According to the CEF figures, the latest projected adjustments are:
- Petrol 93: 5 cents per litre decrease
- Petrol 95: No change
- Diesel 0.05%: R1.91 per litre increase
- Diesel 0.005%: R1.76 per litre increase
- Illuminating paraffin: R1.51 per litre increase
The sharp reversal in fuel price recoveries comes amid rising international oil prices and a weaker rand.
Oil prices initially traded at around $70 a barrel at the beginning of the month, following a temporary easing of tensions between the United States and Iran and the reopening of the Strait of Hormuz.
However, the collapse of the ceasefire later in the month saw hostilities resume and the Strait close again, sending oil prices towards $100 a barrel.
While shipping activity through the Strait has picked up slightly towards the end of the month, helping ease some pressure on global prices, crude oil is currently trading at around $88 a barrel.
Markets remain cautious as uncertainty continues over the conflict and the possibility of further escalation.
The rand has also come under pressure during the month following the South African Reserve Bank's decision to keep interest rates unchanged.
The currency weakened to around R16.80 against the US dollar before recovering to approximately R16.50 following better-than-expected producer inflation data and a sizeable budget surplus recorded in June.
Overall, petrol price recoveries have declined by around R2.50 per litre since the beginning of the month, while diesel recoveries have deteriorated by approximately R5 per litre.
The CEF's daily and monthly snapshots are not the final fuel price adjustments but provide an indication of where prices are heading.
The Department of Mineral and Petroleum Resources is expected to announce the official fuel price changes in the coming days.
The final adjustment could also be affected by other factors, including changes to the slate levy, which could either increase or reduce the final prices.
The latest figures suggest that fuel prices are moving further away from levels seen before the conflict, raising concerns that elevated fuel costs could persist and place additional pressure on inflation.
Petrol prices remain around R6 per litre higher than they were when the conflict began, while diesel prices are more than R7 per litre higher.
Based on current recovery levels, petrol prices could remain largely unchanged in August, while diesel prices could move close to R9 per litre.