Motorists are bracing for yet another financial blow as fuel prices are set to increase across the board in July, according to the latest forecast from the Central Energy Fund (CEF).
The pending price hikes come in the wake of recent Israeli military strikes against Iran, which sent global oil markets into turmoil last week. Brent crude oil experienced its largest daily gain since Russia’s invasion of Ukraine, spiking by as much as 13% following the strikes.
“Any disruption to Middle Eastern oil supply has far-reaching global consequences, as the region accounts for approximately one-third of worldwide crude oil production,” said a market analyst familiar with the situation.
According to the CEF’s latest data tracking fluctuations in oil prices and the rand-dollar exchange rate, motorists can expect the following increases at the pumps next month:
• Petrol 93 – increase of 6 cents per litre
• Petrol 95 – increase of 9 cents per litre
• Diesel 0.05% – increase of 10 cents per litre
• Diesel 0.005% – increase of 12 cents per litre
The conflict between Israel and Iran has continued to escalate, stoking fears of a regional war that could significantly disrupt oil supply chains. Market watchers note that while oil prices have moderated somewhat since the initial spike—trading at $74.4 per barrel on Tuesday morning—they remain substantially higher than pre-strike levels.
“The immediate market reaction has been tempered by the fact that Iran’s oil-exporting infrastructure has been largely spared, with most of the impact confined to shipping routes,” commented an energy sector economist.
However, concerns remain that Iran could potentially block the strategic Strait of Hormuz, a move that would disrupt approximately 20% of global daily oil output. Such action would have catastrophic effects on global oil supplies and prices.
Financial giant JPMorgan Chase has issued a warning that in a worst-case scenario, oil prices could skyrocket to as high as $130 per barrel—nearly double current levels.
For South Africa, an oil-importing nation with an open economy, sustained fuel price increases could trigger broader inflationary pressures. This would complicate the South African Reserve Bank’s efforts to reduce borrowing costs through interest rate cuts, potentially delaying economic relief for consumers already struggling with high living costs.
As tensions continue to simmer in the Middle East, South African consumers are advised to prepare for potential further increases in the coming months should the situation deteriorate.
