While the decrease may be minimal, consumers will welcome the relief.
There is some good news for South Africans on the horizon with reduced petrol and diesel prices in September.
This is due to favourable exchange rates and oil prices allowing for an over-recovery despite the Middle East crisis, which has had minimal impact on Brent Crude.
Data
According to data from the Central Energy Fund (CEF) for the third week of August, the numbers showed that the petrol prices are heading for a small cut of between 6 and 14 cents per litre.
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While the decrease may be minimal, consumers will welcome the relief as they try to make ends meet, and South African inflation is edging up.
Forecasted petrol prices
The CEF data showed that diesel will see a larger price cut of around 52 cents per litre.
Current CEF projections indicate the following mid-month petrol prices.
- Petrol 93: decrease of 14 cents per litre
- Petrol 95: decrease of 6 cents per litre
- Diesel 0.05% (wholesale): decrease of 51 cents per litre
- Diesel 0.005% (wholesale): decrease of 52 cents per litre
The Department of Mineral Resources and Energy (DMRE) will make a final determination by the end of the month.
Rand/Dollar/Oil
The projections stem from an improved position at the beginning of August when the rand/dollar exchange rate was still in the red, undercutting the drop in global oil prices.
While prices had dropped to about $66 a barrel earlier in the month, it has since climbed back up to around $68 a barrel. However, this is still lower than last month, hence the over-recovery for fuel.
Russia/Ukraine
According to Bloomberg, Oil steadied after a report signalled a decline in US stockpiles, while investors weighed the outlook for Ukraine-Russia truce talks.
The market is keeping close tabs on progress toward a ceasefire to the war in Ukraine following a series of high-level talks brokered by President Donald Trump.
Peace deal
Any eventual peace deal could lead to fewer restrictions on Russia’s crude exports, although Moscow has largely kept its oil flowing.
A lot of that crude has been shipped to India since the war, drawing criticism from Trump recently.
On Tuesday, US Treasury Secretary Scott Bessent claimed some of the “richest families in India” benefited from purchases of Russian oil, reiterating plans to boost tariffs on the South Asian nation.
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