South Africans could be in for another potentially devastating fuel price increases in May, with diesel prices set to rise by more than R10 per litre if escalating tensions over the Strait of Hormuz are not resolved, industry data shows.
Early month data from the Central Energy Fund points to diesel price increases of more than R10 per litre, coming on top of the record increases of between R7,37 and R7,51 per litre implemented on 1 April.
The petrol price outlook is less severe but still significant, with CEF data pointing to likely increases in the region of R3 per litre.
The month average under-recovery currently sits between R4,29 for 93 unleaded and R4,69 for 95 unleaded. However, the latest daily data shows figures between R2 and R2,52 in the red, suggesting the former figures could be reduced before month-end.
Brent crude oil was hovering around the $111 mark on Tuesday morning, significantly higher than its average of $94 during the previous review period that determined April’s fuel prices.
The latest oil price spikes come after United States President Donald Trump threatened to decimate Iran if it failed to reopen the critical Strait of Hormuz oil passage by midnight on Wednesday.
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“We have a plan where every bridge in Iran will be decimated by 12 o’clock tomorrow night, where every power plant in Iran will be out of business, burning, exploding and never to be used again,” Trump said on Monday.
On Tuesday morning, reports emerged that Iran had rejected a proposed truce deal despite the threats from the US president.
The IRNA news agency reported that Iran, speaking through mediator Pakistan, had rejected a ceasefire proposal while insisting on the need for a definitive end to the conflict.
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Tehran’s demands reportedly include an end to conflicts in the region, a protocol for safe passage through the Strait, reconstruction and the lifting of sanctions.
Following April’s record increases, a litre of 95 unleaded petrol currently costs R22,53 at the coast and R23,36 in the inland regions, where 93 unleaded retails at R23,25. The wholesale price of 50ppm diesel rose to R25,35 at the coast and R26,11 in Gauteng.
The increases came despite government intervention to reduce the general fuel levy by R3 per litre. Without the temporary relief measure, which runs until 5 May, the increases would have been significantly steeper.
Transport and food costs are expected to rise further if the projected May increases materialise, placing additional pressure on households and businesses already struggling with the April shock.
The next fuel price adjustment is scheduled for 6 May.
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