Middle East fighting pushes oil up what it means for South African fuel prices in August

Renewed fighting in the Middle East has pushed international oil prices higher and is set to shape South African pump prices for August. The conflict resumed on 7 July, sending Brent crude up from roughly $72 a barrel in early July to about $85, according to IOL.

How prices at the pump could move in August

Predicting next month’s local fuel adjustments is difficult given market volatility, but IOL’s calculations suggest divergent outcomes for petrol and diesel if current international oil prices and the rand hold through the rest of July.

• Petrol: IOL reports petrol will likely see a price decrease of between 40 and 50 cents per litre in August if conditions remain as they are.
• Diesel: IOL projects increases of around 98 cents per litre for 50ppm diesel and about R1.10 per litre for 500ppm diesel.

Current price levels cited by IOL

IOL lists recent retail and wholesale price points as reference:

• 95 Unleaded: R25.23 per litre at the coast and R26.11 in Gauteng.
• 93 Unleaded (Gauteng): R25.94 per litre.
• Wholesale 500ppm diesel: R23.91 per litre at the coast and R24.78 inland.
• Wholesale 50ppm diesel: R24.41 per litre at the coast and R25.16 inland.

Why petrol and diesel could move differently

IOL explains that petrol month-to-date figures have shown over-recoveries but recent daily data points to under-recoveries of roughly 50 cents per litre, which could shrink the expected petrol cuts. For diesel, IOL says there are current daily under-recoveries of around R3.00 per litre, though earlier over-recoveries this month may temper the final August adjustment.

Geopolitics remain the key wildcard

The article notes renewed US airstrikes on Iranian military targets and continued Iranian threats to shipping in the Strait of Hormuz, while Al Jazeera reported ongoing regional mediation efforts. IOL cautions that a return to sustained fuel-price relief depends on a renewed ceasefire.

Bottom line

According to IOL, if current oil and currency levels persist through the end of July, motorists can expect a modest petrol cut in August but should prepare for noticeable diesel price increases. Any change to that outlook will be driven by developments in the Middle East over the remainder of the month.