Fuel prices set to rise again in September

South Africa's fuel prices look set to rise again in September, as hopes of peace in the Middle East remain as elusive as ever.

ANA reports that the latest snapshot from the Central Energy Fund (CEF) points to steep diesel price increases in the region of R2.73 for 500ppm and R2.90 for 50ppm.

Petrol price predictions are less severe but significant nonetheless, with CEF data indicating under-recoveries of 66 cents for 93 Unleaded and 77 cents for 95 Unleaded – though if current trends persist, these are likely to grow to increases of around 80 to 90 cents by the time final calculations are made at month-end. Illuminating paraffin looks set for an increase in the region of R2.14.

This follows a volatile few months, during which the price of 95 Unleaded rose from R19.47 in March to R24.71 in August, having peaked at R27.19 in June. The wholesale price of diesel rose from R17.70 in March to R25.30 in August, peaking at R30.30 in May. Both grades of petrol decreased by 52 cents a litre at the start of August, while diesel increased by between R1.23 (50ppm) and R1.38 (500ppm).

Volatile oil markets

International oil markets have seen extreme volatility since the US–Israeli war with Iran began in late February, with the Strait of Hormuz – a critical passage for oil shipping – mostly closed to traffic.

The markets appear to have settled somewhat since, with Brent crude trading mostly around $90 a barrel in August, down from highs of around $126 earlier in the year, though prices remain well above pre-war levels of around $70.

Ole Hvalbye, a commodities analyst at SEB, told Reuters that a return to normal flows out of the Strait of Hormuz was, for now, without any near-term prospect.

Analysts nonetheless expect a gradual softening in international oil prices, with JP Morgan predicting Brent will average around $86 in the third quarter of this year, falling to $80 in the fourth quarter and $78 in 2027.