Cape Town – South African motorists are facing the prospect of another sharp fuel price increase in October, with early Central Energy Fund (CEF) data showing that petrol and diesel prices have started the month deep in under-recovery territory.
The latest figures come as the latest fuel increases take effect on Wednesday, 2 September, adding further pressure to households and businesses already dealing with higher transport costs.
According to the CEF data, petrol 93 is showing an under-recovery of R2.11 per litre, while petrol 95 is R2.22 per litre.
Diesel is facing even steeper pressure, with 0.05% sulphur diesel showing an under-recovery of R2.83 per litre and 0.005% diesel at R3.11 per litre.
Illuminating paraffin is also showing an under-recovery of R2.73 per litre.
These figures indicate what fuel prices would need to increase by if current market conditions were to remain unchanged for the rest of the review period. They are not yet forecasts of the final October adjustment, as international oil prices and the rand-dollar exchange rate can change significantly during the month.
The early warning comes as global oil markets remain under pressure following renewed military tensions between the United States and Iran.
Reuters reported on Wednesday that Brent crude had climbed to around $95 a barrel after renewed US-Iran hostilities raised fears of further disruptions to energy supplies. Brent reached a five-week high of $95.18 during trading.
FUEL PRICES | South Africans are bracing for another fuel price hike this week, which is likely to add more pressure on motorists who are already grappling with rising living costs. pic.twitter.com/SMEYREnYtp
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The Strait of Hormuz remains a key concern for energy markets because of its importance to global oil shipments.
The report said that although oil continues to move through the strategic waterway, the conflict has created significant uncertainty around future supply flows. The US Energy Secretary also said about 17 million barrels of crude passed through the strait on Monday, indicating that flows have not stopped completely.
The pressure is being compounded by disruptions affecting energy infrastructure and supply from the Russia-Ukraine conflict, particularly in the diesel market.
If oil prices remain elevated, South Africa is likely to continue feeling the impact because local fuel prices are heavily influenced by international petroleum prices and the rand-dollar exchange rate.
The rand is providing some protection against the surge in oil prices, although not enough to eliminate the current under-recoveries.
The currency was trading around R16.15 to the dollar in the latest data cited in the fuel-price outlook.
Meanwhile, the Department of Mineral and Petroleum Resources confirmed increases of R1.34 per litre for both grades of petrol from 2 September. Diesel rose by R2.93 per litre for 0.05% sulphur and R3.14 per litre for 0.005% sulphur. Illuminating paraffin increased by R2.13 per litre.
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This means motorists are entering the October pricing cycle immediately after another significant jump at the pumps.
The situation also highlights how quickly fuel-price expectations can change. Earlier forecasts for September showed considerably smaller increases before worsening oil-market conditions pushed the expected adjustment higher.
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Compiled by Glaan Sibuyi
