The fuel price movements for July 2021 are proving a bit harder than usual to project, with recent spikes in international crude oil prices threatening to outweigh the impressive gains that the South African rand has made in recent times.
Although petrol has seen a slight over-recovery during June, which under normal circumstances would have led to a small price drop, the most recent daily numbers have been in the red to the tune of up to 20 cents and if this trend continues for the rest of the month then South Africans will be in for a slight petrol price increase.
Diesel is looking certain to go up, however, with an average under-recovery for the month so far pointing towards a 20 cent decrease, which could rise further given that the most recent daily deficits have been over 30 cents.
Why are fuel prices rising? International crude oil prices rose to three-year highs earlier this week, according to ABC News, with Brent crude rising to almost $73 a barrel on Monday. Brent crude has risen by over $20 since the beginning of 2021 and by over $45 since the pandemic-related price crash of April 2020.
South African petrol prices have increased by R2,25 since the beginning of 2021, with the cost of a litre of 95 Unleaded petrol at the coast having risen from R14,16 in January to R16,41 in June. Diesel has been slightly more forgiving, with the coastal wholesale price of low-sulphur 50 ppm having increased from R12,43 to R14,11, keeping in mind that the unregulated retail prices, which are not listed, are a bit higher than that.
With the global economy in recovery mode as the pandemic threat subsides, the threat remains that international oil prices will continue to rise, which is not good news for SA fuel prices.