Brent Crude has maintained levels above $100 per barrel throughout the latter half of this week. Market anxiety surrounding an extended Middle East conflict continues to drive this upward momentum.
The implications for local fuel budgets are severe. Current fuel prices, effective from March 4, were calculated using an oil average of $64 per barrel during the previous review period. Since the start of March, Brent Crude has averaged $88, with further increases anticipated based on prevailing market conditions.
“But what does this mean for your fuel budget in April? It’s really bad news.”
The Central Energy Fund’s latest projections indicate substantial increases ahead. Preliminary data points to rises of R3.97 for 95 Unleaded petrol and R3.61 for 93 Unleaded. Diesel appears headed for increases between R6.63 for 500ppm and R6.74 for 50ppm variants.
These figures represent the current month-to-date average under-recovery, essentially constituting a best-case scenario. This assumes no sudden resolution to the conflict that might trigger an oil price collapse.
Daily under-recovery figures paint a more alarming picture. Recent data shows under-recoveries reaching R6.43 for 95 ULP petrol and R10.77 for 500ppm diesel. Should these trends continue through month-end, with oil remaining above $100 and the rand maintaining its current weak position, motorists face even steeper costs.
Calculations suggest petrol could rise by more than R5.20 per litre, while diesel may surge past R8.80. These projections exclude additional tax burdens set to take effect from April 1.
The General Fuel Levy, Carbon Levy and Road Accident Fund levy increases will collectively add 21 cents per litre to final pump prices.
| Fuel Type | Current Price (March) | Projected Increase (CEF) | Worst Case Scenario | April Price (CEF Projection) | April Price (Worst Case) |
|---|---|---|---|---|---|
| 93 Unleaded Petrol | R22.34 | +R3.61 | +R5.20+ | R25.95 | R27.54+ |
| 95 Unleaded Petrol | R22.64 | +R3.97 | +R5.20+ | R26.61 | R27.84+ |
| Diesel 500ppm | R20.50 | +R6.63 | +R8.80+ | R27.13 | R29.30+ |
| Diesel 50ppm | R20.70 | +R6.74 | +R8.80+ | R27.44 | R29.50+ |
Note: Current prices based on March 4 adjustment. Projections exclude additional 21c/litre in fuel tax increases effective April 1. Worst case assumes oil remains above $100/barrel and rand weakness persists. Source: Central Energy Fund data and market calculations.
Geopolitical Tensions Escalate
Oil markets reacted sharply to developments involving Iran.
“Oil prices hit the $100 mark once again this week after Iran’s new leader, Ayatollah Mojtaba Khamenei, called for blocking the Strait of Hormuz and opening new fronts against the US and Israel, AFP reported.”
Iranian forces have targeted vessels near Iraq, fuel storage facilities in Bahrain, and Saudi oil infrastructure. Tehran has issued warnings that regional energy assets will face retaliation should its own facilities come under attack.
Since hostilities commenced on February 28, Brent crude has climbed 40%. This surge has persisted despite the International Energy Agency’s unprecedented release of 400 million barrels from strategic reserves, a measure that failed to quell supply concerns.
South Africa faces mounting economic headwinds. The prolonged conflict threatens to accelerate inflationary pressures, exert additional downward force on the already struggling rand, and diminish prospects for monetary easing.
The likelihood of an interest rate reduction this month has decreased substantially as policymakers weigh these external risks.
The full extent of economic damage remains uncertain, though the trajectory points toward sustained financial strain for both consumers and businesses dependent on fuel and energy inputs.