South Africa’s fuel price outlook has gone from bad to worse… to catastrophic

If oil stays above $100 per barrel, the resulting fuel price increases will be damaging. The price of Brent Crude oil has been hovering stubbornly above the $100 mark during the latter half of this week, largely driven by fears of a prolonged war in the Middle East. But what does this mean for your fuel budget in April?

It’s really bad news. Should this situation persist, South Africans could be facing fuel price increases that are even more damaging than originally anticipated. Consider this for a second.

South Africa’scurrent fuel prices, effective from March 4, are based on oil averaging $64 per barrel during the last review period. Since the beginning of March, Brent Crude has averaged $88, and that number looks set to rise even further given the aforementioned market developments. The most recent update from the Central Energy Fund is pointing to price increases of R3.97 for 95 Unleaded petrol and R3.61 for 93 Unleaded, while diesel is looking set to rise by between R6.63, in the case of 500ppm, and R6.74 for 50ppm. This is based on the current month-to-date average under-recovery, and could be seen as the current best-case scenario, assuming there isn’t a sudden end to the war that sends oil prices plunging.