Further fuel price cuts possible in August as over-recoveries show relief

South African motorists could see further relief at the pumps in August if international oil prices remain at current levels for the rest of July, according to the latest daily data from the Central Energy Fund (CEF).

What the numbers show

The CEF data shows over-recoveries of between 76 cents and 86 cents per litre for petrol, while diesel is recording a smaller over-recovery of about 20 cents per litre. These over-recoveries would, if they persist through the remainder of the month, support lower wholesale and retail prices when August adjustments are calculated.

How prices compare to earlier in the year

Despite recent decreases, fuel remains significantly more expensive than it was in March. 95 Unleaded is R5.76 more than in March, and 50ppm diesel is R6.57 more expensive.

Current retail and wholesale prices

Retail prices cited in the CEF data list a litre of 95 Unleaded at R25.23 at the coast and R26.11 in Gauteng, and 93 Unleaded at R25.94 in Gauteng. Wholesale prices for diesel are given as 500ppm diesel at R23.91 at the coast and R24.78 inland, with 50ppm diesel at R24.41 at the coast and R25.16 inland.

What is driving international oil prices

Brent crude has hovered around the $72 mark since late June. International events are pulling prices in different directions: recent OPEC+ production increases have put downward pressure on prices and Middle East exports are recovering, while fresh attacks on commercial ships in the Strait of Hormuz have revived concerns about supply security. Overall, the CEF notes that strong global supply is keeping oil prices stable so far.

Why motorists may welcome any relief

After a period of sharp price increases from April to June, any further decreases would provide welcome relief to motorists and commuters. July already saw notable fuel price decreases come into effect following a truce between the US and Iran.

Bottom line

Any further relief in August hinges on oil prices remaining at current levels for the rest of July. The CEF over-recovery figures suggest scope for cuts, but much could still change between now and month-end.