South African motorists and logistics operators are facing an abrupt reversal in fuel fortunes ahead of August.

While earlier projections pointed to significant price cuts across the board, the latest data, from 20 July, reveals a widening divide between petrol and diesel prices, driven by a global-supply squeeze and mounting geopolitical pressures.

According to the Central Energy Fund (CEF) petrol continues to hold a modest month-to-date buffer, but diesel has swung firmly into under-recovery territory, with single-day figures pointing to sharp cost increases on the horizon.

Data from the CEF tracking movements between 26 June and 20 July shows a stark divergence in unit recovery rates:

• Petrol 95 ULP: Average over-recovery of 78,61 cents per litre.
• Petrol 93 ULP: Average over-recovery of 83,44 cents per litre.
• Diesel 0.05%: Average under-recovery of 44,62 cents per litre.
• Diesel 0.005%: Average under-recovery of 21,91 cents per litre.

While average petrol figures reflect lingering gains from earlier in the month the single-day snapshot for 20 July paints a far more dramatic picture. Daily under-recovery figures for diesel reached between R3,71 and R3,82 per litre. If these daily losses persist through month-end, the accumulated average will erode earlier gains and force a substantial diesel price increase at the pumps in August.

A global double-whammy: Russia and the Middle East

According to Daily Investor, the sudden spike in import costs stems from twin crises impacting international petroleum benchmarks.

First, Russian President Vladimir Putin announced a complete suspension of seaborne diesel exports until 31 July following Ukrainian drone strikes that severely damaged domestic refining infrastructure.

Russia, which accounted for 11% of global diesel exports last year, saw its seaborne shipments plunge from 535 000 barrels per day down to 187 000. The move caused European benchmark diesel margins to hit a record $60,17 (R988,59) per barrel.

Second, renewed hostilities in the Middle East have reignited supply fears. After a temporary reprieve when the Strait of Hormuz reopened on 17 June negotiations between the United States and Iran broke down, leading to renewed military action.

Because South Africa’s Basic Fuel Price (BFP) for diesel is calculated using a 50/50 benchmark of Mediterranean and Arabian Gulf spot prices local consumers are directly exposed to both crisis zones.

“Both reference markets sit inside the affected region caught in these two major developments,” warned the Centre for Risk Analysis (CRA). “A renewed Iran conflict raises the dollar price of the benchmark, while a prolonged Russian diesel absence removes a large volume of physical supply that would otherwise have relieved that pressure.”

Low strategic reserves leave SA vulnerable

The international turmoil has put renewed scrutiny on South Africa’s national buffer stocks.

Minister of Mineral and Petroleum Resources Gwede Mantashe previously dismissed concerns regarding fuel availability, pointing out that South Africa’s diplomatic ties with Iran allowed South African-flagged vessels passage through the Strait of Hormuz.

There’s no shortage of petrol, oil or diesel in the country. It is just expensive. That is the function of the price… supply is available because we are not an enemy of Iran.

Despite these assurances, several retail filling stations reported localised diesel stockouts in recent weeks.

Official CEF figures reveal that South Africa holds approximately 8 million barrels of strategic crude oil reserves – equivalent to roughly two weeks of national consumption – and holds zero refined diesel in strategic reserves. This falls drastically short of the legally mandated 60-day buffer requirement.

With limited domestic refining capacity and no national refined diesel buffer, South Africa remains reliant on imported finished products.

Analysts warn that key primary industries will bear the brunt of any August diesel price hike. Transport, logistics, mining, and commercial agriculture — all heavily reliant on diese — are expected to face immediate operational cost increases, which could subsequently feed into broader consumer inflation.