South African motorists could receive some much needed fuel price relief next month.
Image: David Ritchie / Independent Media
Following months of punishing fuel price increases that have seen diesel prices rise by up to R10.16 and petrol by R7.72, early data shows that some relief could be on the horizon in July.
However, there are a few complicating factors and risks, as oil markets remain on a knife-edge over the Middle East war and the elusive peace deal.
On the face of it, the latest data from the Central Energy Fund shows an over-recovery of around R2.55 for petrol, while diesel could land between R3 and R4 in the green if current trends persist until month-end.
However, with the temporary fuel tax reprieve having been fully withdrawn last month, an extra R1.50 will need to be factored into the fuel price equation. This means that, on the face of it, the decreases could be reduced to R1 for petrol and R2 for diesel.
It is possible that this may be mitigated to some degree if the Slate Levy is lowered next month. This mechanism, which compensates oil companies for price fluctuations during the preceding month, currently adds R1.58 to the price of fuel.
There is another caveat.
Although oil prices have receded from the highs seen in previous months, the situation in the Middle East remains volatile, and the much-anticipated truce between Iran and the US seems as elusive as ever.
The two sides have traded blows in recent days, while Israel has further complicated truce negotiations through its attacks on Iran's ally, Lebanon.
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