Motorists brace for sharp fuel price hike in September

South African motorists are facing steep fuel price hikes in September as international oil prices remain elevated due to the ongoing conflict in the Middle East .

The latest information from the Central Energy Fund is pointing to petrol price increases in the region of 80 cents for 93 Unleaded and 90 cents for 95 Unleaded. However, if the sharper over-recovery figures that we've seen in recent days persist until month-end, we could see increases in the R1.00 to R1.10 range.

The diesel price outlook is far more severe, with the CEF data indicating potential price hikes of around R2.85 for 500ppm and R3.05 for 50ppm, and these could rise further if current trends persist.

Petrol and diesel prices are expected to increase sharply in September.

Illuminating paraffin is looking set for an increase in the region of R2.23.

The past few months have been volatile and punishing for motorists, with the price of 95 Unleaded having increased from R19.47 to R24.71 between March and August , peaking at R27.19 in June . The wholesale price of diesel has risen from R17.70 in March to R25.30 in August, peaking at R30.30 in May.

Both grades of petrol decreased by 52 cents per litre at the beginning of August, while diesel increased by between R1.23 (50ppm) and R1.38 (500ppm).

International oil markets have seen extreme volatility since the US-Israeli war with Iran began in late February, with the critical Strait of Hormuz oil passage mostly shut to shipping traffic.

While the markets appear to have settled, with Brent crude oil trading mostly around the $90-per-barrel mark in August, down from highs of around $126 earlier in the year, prices remain well above pre-war levels of around $70.

Ole Hvalbye, commodities analyst at SEB, recently told Reuters: “A return to normal flows out of the Strait of Hormuz is now suddenly without any near-term hopes.”

However, analysts do see a gradual softening of international oil prices, with JP Morgan predicting an average of around $86 for Brent in the third quarter of this year, falling to $80 in the fourth quarter and $78 in 2027.