Petrol and diesel prices are said to rise again in May.
Image: David Ritchie / Independent Media
Following record petrol and diesel price increases in April, which were partly softened by a R3 per litre tax reprieve, South Africans are nervously anticipating May’s fuel price announcement.
As the Middle East war caused international oil prices to surge in early April, widespread fears emerged of another punishing fuel price increase next month. However, since the temporary ceasefire between the US and Iran, announced on April 8, oil prices have trended lower, with Brent crude averaging around US$95 per barrel.
Given that the Middle East situation remains volatile, with no permanent end to the conflict in sight, it is difficult to accurately predict where fuel prices will land next month. However, the lower international oil costs have so far softened the blow of what could have been far more significant increases.
Latest snapshot from the Central Energy Fund.
Image: CEF
The latest daily snapshot from the Central Energy Fund is currently pointing to petrol price increases of between R2.02 (93 Unleaded) and R2.35 (95 Unleaded), and diesel increases of around R7.07 per litre. But these month averages are a moving target, and significantly more favourable daily numbers — with an over-recovery now developing on diesel — are reducing these figures by the day.
Should oil prices remain at their current levels, the diesel increase is likely to be reduced to around R4 per litre by month-end, while the petrol increase could subside to around R1.40. These projections are also based on the assumption that Treasury will extend the current R3 per litre temporary reduction in the General Fuel Levy. Government has indicated that the relief measure would be reviewed at the end of April, but there is no confirmation of an extension as yet.
Following April’s record increases, a litre of 95 Unleaded petrol currently costs R22.53 at the coast and R23.36 in inland regions, where 93 Unleaded retails at R23.25. The wholesale price of 50ppm diesel rose to R25.35 at the coast and R26.11 in Gauteng, with retail prices in the R28 to R29 range. Pump prices in the R30 to R35 range are almost certain for May.
Oil prices edged lower on Tuesday morning, and Asian stocks rose as investors held out hope for a breakthrough in tensions between the United States and Iran that could reopen the Strait of Hormuz. The key oil transit route, which handles roughly a fifth of global supply, has been repeatedly disrupted amid a fragile ceasefire.
Despite optimism in markets, uncertainty remains over whether Tehran will participate in renewed peace talks, with both sides accusing each other of breaching the truce. US President Donald Trump said the blockade on Iran would remain until a deal is reached, while Iranian officials rejected negotiations under pressure, raising fears that hostilities could resume once the ceasefire expires.