There is some good news for South Africans on the horizon with reduced petrol and diesel prices in September.

According to The Citizen, 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, petrol prices are heading for a small cut of between 6c and 14c per litre.

While the decrease may be minimal, consumers will welcome the relief as they try to make ends meet, with South African inflation edging up.

Forecasted petrol prices

The CEF data showed that diesel will see a larger price cut of around 52c per litre.

Current CEF projections indicate the following mid-month petrol prices:

• Petrol 93: decrease of 14c per litre
• Petrol 95: decrease of 6c per litre
• Diesel 0.05% (wholesale): decrease of 51c per litre
• Diesel 0.005% (wholesale): decrease of 52c per litre

The Department of Mineral Resources and Energy 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, they have since climbed back 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.

Much of that crude has been shipped to India since the war, drawing criticism from US President Donald Trump recently.

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.