Significant fuel price increases predicted for September: Here's what to expect

Fuel price hikes are expected for September in South Africa, primarily due to persistently high international oil prices stemming from the ongoing Middle East conflict. The Central Energy Fund predicts petrol prices will rise by roughly 90 cents per litre for 93 Unleaded and 1.01 cents for 95 Unleaded. However, this recovery may intensify by the end of the month.

Diesel prices are anticipated to surge towards another crisis, with potential hikes of about R2.88 for 500ppm and R3.09 for 50ppm, according to CEF data. Paraffin is also expected to see an increase of approximately R2.23.

South Africa has experienced a tumultuous year for fuel prices. The price of 95 Unleaded surged from R19.47 to R24.71 between March and August, peaking at R27.19 in June. Diesel prices rose from R17.70 in March to R25.30 in August, hitting a peak of R30.30 in May. Both petrol grades experienced a drop of 52 cents per litre at the start of August, while diesel prices rose between R1.23 (50ppm) and R1.38 (500ppm).

Global oil markets have witnessed substantial volatility since the US-Israeli war with Iran commenced in late February, with the crucial Strait of Hormuz oil passage largely blocked to shipping traffic. Although the markets seem to have stabilized, with Brent crude oil trading near $90 per barrel in August, down from peaks of around $126 earlier in the year, prices are still significantly higher than pre-war levels of roughly $70.

Ole Hvalbye, commodities analyst at SEB, told Reuters, "A return to normal flows out of the Strait of Hormuz now appears to be without any near-term hopes."

On the brighter side, analysts anticipate a gradual decline in international oil prices. JP Morgan predicts Brent crude to average around $86 by the third quarter of the year, falling to $80 in the fourth quarter and $78 in 2027.