Early projections pointing to sharp hikes in diesel, petrol and paraffin.
With just two weeks remaining before the official fuel price adjustment is determined, the latest estimates from the Central Energy Fund indicate that diesel could rise by as much as R6.75 per litre, while 95-octane petrol may increase by nearly R4 per litre.
Consumers who rely on paraffin could experience an even larger shock, as the current estimate suggests an increase of about R8.53 per litre.
These projections reflect what the price adjustments would be if they were implemented today, based on prevailing international fuel prices in US dollars and the rand-dollar exchange rate.
In addition to these under-recoveries, a 21-cent per litre fuel levy increase is scheduled to take effect. If market conditions remain unchanged, this would push the total increase to around R7 per litre for diesel and almost R4.20 per litre for petrol.
The rand has weakened by almost 5% since the start of the Middle East conflict on 28 February, but currency depreciation is currently responsible for only 30 to 44 cents per litre of the projected under-recoveries. The rand is now trading at R16.91 to the dollar, compared with R15.88 a month ago.
The primary driver of the expected increases is the sharp rise in the price of Brent Crude Oil, which serves as the benchmark for South Africa’s fuel pricing. The oil price closed above $100 per barrel on Thursday, marking the first time it has reached that level since August 2022.
The pricing period used to calculate April’s fuel adjustments ends on 26 March, with the new prices set to take effect on Wednesday, 1 April. This means there are two weeks left for the situation to either improve or deteriorate, depending largely on developments in the conflict involving Iran, Israel and the United States.
Tensions have intensified after Iran moved to block the Strait of Hormuz, a critical maritime passage linking the Persian Gulf to the open ocean. Roughly 20% of the world’s oil supply normally passes through this route.
Amid the looming price shock, there have been growing calls for the government to delay the planned fuel levy increase or temporarily reduce overall fuel levies, which currently total R6.37 per litre, in an effort to protect farmers, consumers and the broader economy from the anticipated surge.
Fuel prices have already risen recently. Following a 20-cent per litre increase in March, 95-octane petrol is currently priced at R20.30 per litre in Gauteng and R19.47 per litre at the coast.
Meanwhile, diesel with 0.05% sulphur saw its wholesale price rise by 62 cents per litre in March. It is currently selling for about R18.34 per litre in Gauteng and R17.71 per litre at the coast. Unlike petrol, diesel retail prices are not regulated.
