August fuel relief shrinks as Iran-US tensions push oil prices up
Mid-month projections show petrol and diesel price cuts for August are still on the cards, but they will be smaller than initially expected.
South African motorists hoping for another round of significant fuel price cuts in August may be in for a nail-biting wait, as escalating US-Iran tensions in the Middle East threaten to erode the projected drops.
Early data from the Central Energy Fund (CEF) pointed to a second consecutive month of major relief at the pumps, with petrol expected to drop by over R2 per litre and diesel by up to R3.50. However, renewed conflict around the strategic Strait of Hormuz has sent global oil prices soaring, shrinking those potential cuts by as much as 60% to 80%.
What the mid-month projections show
Before the geopolitical shock, the cumulative data from the first half of July painted a promising picture for the official price announcement on August 5.
The early, optimistic projections were:
- Petrol 93: -R2.02
- Petrol 95: -R2.04
- Diesel 0.05%: -R2.22
- Diesel 0.005%: -R2.60
However, the latest figures, reflecting the spike in oil prices, now show a far smaller decrease:
- Petrol 93: Decrease of R1.55 to R1.63 per litre
- Petrol 95: Decrease of R1.52 to R1.62 per litre
- Diesel 0.05%: Decrease of R1.08 to R1.29 per litre
- Diesel 0.005%: Decrease of R1.38 to R1.59 per litre
A mid-month projection is just a snapshot of a highly volatile situation. The final price will depend on how the situation between the US and Iran unfolds over the coming weeks.
The final fuel prices for August will be announced by the Department of Mineral and Petroleum Resources at the end of July and will take effect on Wednesday, August 5.
