Fuel prices set for mixed August as diesel heads for sharp rise

South African motorists face a mixed fuel-price outlook for August: petrol is expected to remain broadly unchanged while diesel looks set for significant increases after international oil prices swung sharply in July.

What the Central Energy Fund data shows

Data from the Central Energy Fund released at the end of July points to a five-cent decrease for 93 Unleaded and an unchanged price for 95 Unleaded in the August adjustment. The CEF figures indicate 95 Unleaded at R25.23 at the coast and R26.11 in inland regions, while 93 Unleaded is shown at R25.94 in inland areas.

Diesel set to rise sharply

By contrast, diesel is expected to face major upward pressure after a surge in international product prices during July. The CEF points to increases of about R1.75 for 50ppm diesel and R1.91 for 500ppm diesel.

Those wholesale estimates put 500ppm diesel at around R25.82 at the coast and R26.69 in Gauteng. For 50ppm diesel the wholesale estimates are about R26.16 at the coast and R26.91 in Gauteng. The CEF notes that pump prices will be at least R2 to R3 higher because diesel is unregulated.

Final adjustments and the Slate Levy

The Department of Mineral and Petroleum Resources is scheduled to announce the official August fuel price adjustments early this week. The CEF cautions that the Slate Levy currently R1.14 per litre could still affect the final outcome: a significant reduction in the levy could produce a larger petrol decrease and a softer diesel increase, but a reduction is not guaranteed.

Why diesel is rising: international oil volatility

International oil markets were volatile in July. Prices began the month at around $72 a barrel, climbed above $100 a barrel amid tensions in the Middle East and fears of supply disruptions, then fell to about $88 a barrel after renewed hopes of a ceasefire and a single-session drop of more than 8%.

What this means for drivers

With diesel facing sharp wholesale increases and pump diesel unregulated, consumers using diesel should expect noticeably higher prices at the bowser if the CEF projections hold and the Slate Levy remains unchanged. Petrol drivers are more likely to see prices hold at current levels according to the CEF data.