The latest fuel price data does not look promising for August, showing a flat result and a possible increase for diesel.
Although petrol prices have slightly overrecovered by about 15 cents per litre at the start of July to around seven cents, the latest Central Energy Fund data shows that diesel is experiencing an under-recovery of up to 18 cents per litre.
Also read: Fuel price cuts delayed by ministerial approval
As reported by BusinessTech, this points to a reversal of the downward trend seen over the past two months, resulting in a generally flat outlook for prices in August.
The main cause is the increase in global oil prices.
However, the stronger South African rand has contributed to an over-recovery of around 16 cents per litre.
The latest Bloomberg oil market analysis shows that Brent crude continues to climb thanks to stronger demand, signalling that the US Federal Reserve could reach a much-anticipated pivot to lower interest rates.
Vessel-tracking data also shows a sharp decline in Russian exports although prices have increased against supply cuts by oil-producing nations.
Cape {town} Etc discount: Looking for things to do in the city at half the price? Get exclusive offers here.
According to BusinessTech, this could mean that the market correction (dropped prices) could end. However, the Central Energy Fund notes that weaker demand from China could keep prices contained.
This week, Annabel Bishop, chief economist at Investec, issued a warning: if the recent increase continues, fuel costs in August may rise following two months of declining South African prices due to international drops in the price of petroleum products.
Conversely, Nedbank economists are optimistic, noting that oil prices have remained below $94 a barrel (the highest in 2024 to date). ‘We expect a firmer rand to contain the impact of elevated global oil prices on domestic fuel prices during the remainder of the year, adding to overall inflation, but only moderately,’ Nedbank said.
The Refinitiv consensus survey found that the Brent crude price will remain rangebound during the second half of this year, edging around $85.1 by the end of the third quarter and $81.55 by the end of the fourth, averaging $83.93 for the year.
Unleash your inner explorer with these incredible car deals, all priced under R100 000. Find car listings here.
Also read:
Picture: Dawn McDonald / Unsplash