Diesel Prices Set to Rise: What South Africans Should Expect Next Month
South African motorists, particularly diesel users, are bracing for another blow at the pumps next month as diesel prices are set to climb once again, driven by global supply constraints.
The anticipated price hike stems largely from a diesel supply shortage in the United States and Europe. This has been triggered by widespread refinery closures in the northern hemisphere, alongside unplanned outages at remaining operational facilities. With fewer refineries producing fuel, the global diesel supply has tightened significantly sending ripple effects across markets, including South Africa.
Expected Fuel Price Adjustments
According to South Africa’s Central Energy Fund (CEF), fuel prices are projected to shift as follows in the upcoming adjustment:
| Fuel Type | Expected Price Change per Litre |
|---|---|
| Petrol 93 | -28 cents |
| Petrol 95 | -24 cents |
| Diesel 0.05% | +66 cents |
| Diesel 0.005% | +65 cents |
While petrol users can look forward to a modest drop in prices, diesel users face an increase of over 60 cents per litre, putting additional pressure on transport and logistics sectors, as well as everyday consumers.
Contributing Global Factors
Several global dynamics are influencing the current fuel landscape:
- Geopolitical Tensions: The ongoing conflict involving Israel and Iran has threatened fuel exports from the Persian Gulf, though risks have slightly subsided.
- OPEC+ Cuts: Output cuts by Saudi Arabia and Russia have further squeezed global supply, contributing to upward price pressure.
- Seasonal Disruptions: Intensifying summer heatwaves and the looming North Atlantic hurricane season could disrupt refining operations in the US.
- Trade Negotiations: On the positive side, US negotiations with China and the European Union have avoided major escalations, supporting global trade stability. However, uncertainty lingers over potential 30% tariffs on EU exports to the US.
Silver Linings Amid Price Pressures
Despite these concerns, some encouraging signs remain:
- OPEC Production Recovery: Crude oil output from OPEC is gradually increasing, and improved refining margins are prompting plants to ramp up activity, which could help ease the diesel crunch in the coming months.
- Stronger Rand: The South African Rand has shown resilience, strengthening by 1.35% over the past month. A stronger Rand lowers the cost of importing fuel, helping offset some of the international price pressures.
- Petrol Price Relief: Petrol users are set to benefit from the combination of a stable Rand and falling oil prices, with petrol 93 and 95 expected to drop by 28 and 24 cents per litre, respectively.
Although there is some relief for petrol users, diesel motorists should prepare for a noticeable increase in fuel costs next week. The global market remains volatile, and local consumers are encouraged to stay informed and plan accordingly to avoid being caught off guard by future price swings.
Related article: Expected Petrol Price Decrease for August Revealed