Here is the expected petrol price for August

Mid-month data from the Central Energy Fund shows that motorists could see a petrol price reprieve for the first time in months – but the full withdrawal of the government’s interventions will undermine this.
The data, which serves as a snapshot of market conditions as of 14 July 2022, shows that the petrol price could drop by as much as R1.08 per litre next month, while diesel is showing an over-recovery of 94 cents per litre.
The mid-month snapshot is as follows:
- Petrol 95: over-recovery/decrease of 98 cents per litre;
- Petrol 93: over-recovery/decrease of 108 cents per litre;
- Diesel 0.05%: over-recovery/decrease of 92 cents per litre;
- Diesel 0.005%: over-recovery/decrease of 94 cents per litre;
- Illuminating Paraffin: over-recovery/decrease of 95 cents per litre.
The Department of Energy has stressed that the daily snapshots are not predictive and do not cover other potential changes like slate levy adjustments or retail margin changes, which are determined by the department at the end of the month, taking all variables into account.
The DoE makes adjustments based on a review of the entire period. Furthermore, the outlook can change significantly before month-end.
The snapshot also does not include the fuel price interventions announced by the Department of Mineral Resources and Energy and National Treasury in April 2022. The initial interventions saw R1.50 removed from the general fuel levy for April and May. This was then extended to June and then halved in July when 75 cents per litre was added back to the levy.
The intervention will come to an end in August, when the remaining 75 cents per litre will be added back to the price.
Without the government’s intervening extension, this means that instead of a R1 per litre drop in fuel prices in August, the reduction would be around 23 to 33 cents per litre for petrol, and 17 to 19 cents per litre for diesel.
Interventions aside, local fuel price fluctuations are impacted by two main factors – the international price of petroleum products, driven mainly by oil prices, and the rand/dollar exchange rate used in purchases of these products.
For the first two weeks of July, oil prices made a move below $100 a barrel, contributing to a significant over-recovery in local prices. However, this was significantly undermined by the weakening rand, which negatively impacted prices.
Oil prices
Oil is poised to end the week below $100 a barrel for the first time since early April after another volatile trading period marked by escalating concerns over an economic slowdown, Bloomberg reports.
A stronger dollar and Covid-19 outbreaks in China have added to pressure on oil prices, it said.
“West Texas Intermediate tumbled below $91 a barrel on Thursday, erasing all of the gains seen in the wake of Russia’s invasion of Ukraine in late February, before clawing back some of those losses. Futures edged higher on Friday, but the US benchmark is still down around 8% for the week.”
While prices are trading lower for now, Goldman Sachs predicts that prices will still climb in 2022. In what it calls an “adverse scenario”, the finance group believes Brent crude’s fair value would be $120 in the second half of 2022 and $110 in 2023, down from previous forecasts of $135 and $125 a barrel, respectively.
Even in the group’s worst-case scenario, it projects the fair value of oil at $105 for H2 2022 and $90 a barrel in 2023, also above market forwards.
“As a result, we reiterate our bullish oil price view following the recent sell-off,” it said.
The drop in the fuel price has contributed almost R2 per litre to the over-recovery in local fuel pricing.
Exchange rate
The rand has weakened significantly in recent weeks, climbing to fresh highs around R17.17 to the dollar on Friday (15 July).
Despite local troubles, including weeks-long load shedding and warnings of civil unrest, the rand’s weakness has largely been at the whims of global markets and strong performances from major economies.
Ryan Booysen, managing director of DG Capital Forex Solutions, noted that “most of the collapse is due to dollar strength”.
“The US dollar is at its strongest level in 20 years. The dollar index, which measures the value of the US dollar against a basket of six other major currencies, has strengthened some 12.7% since 1 January 2022 and 17.1% over the past 12 months, on the back of a hawkish Fed and the start of the US interest rate hiking cycle,” he said.
“While other central banks are also on a tightening path – the SARB included – the Fed is doing so more aggressively than in the rest of the globe, hence the extreme strength of the US dollar.”
Market worries over high inflation are increasingly being replaced by fears of excessive interest rate hikes that drive economies into recession. This has pushed investors into more secure markets like the dollar, while avoiding riskier markets like the rand.
“With a risk-off mindset provoked by recession fears in the US and Europe, and the ongoing hostility in Ukraine and China growth concerns, (we have) seen a flight of assets to the safety of the greenback,” Booysen said.
Domestically, severe load shedding has also worried markets over the country’s growth prospects, which in turn risks negatively impacting state finances via revenue generation.
The weaker rand has contributed between 90 and 98 cents per litre to an under-recovery in local fuel pricing.
The table below shows how prices would be affected at mid-month rates.
Inland | July official | August Expected |
---|---|---|
95 Petrol | R26.74 | R25.76 |
93 Petrol | R26.31 | R25.23 |
0.05% diesel (wholesale) | R25.40 | R24.48 |
0.005% diesel (wholesale) | R25.53 | R24.59 |
Illuminating Paraffin | R19.86 | R18.91 |
Coastal | July official | August Expected |
---|---|---|
95 Petrol | R26.09 | R25.11 |
93 Petrol | R25.66 | R24.58 |
0.05% diesel (wholesale) | R24.75 | R23.83 |
0.005% diesel (wholesale) | R24.89 | R23.95 |
Illuminating Paraffin | R19.15 | R18.20 |
The table below shows how prices would be affected after the conclusion of the government’s fuel price interventions.
Inland | July official | August Expected |
---|---|---|
95 Petrol | R26.74 | R26.51 |
93 Petrol | R26.31 | R25.98 |
0.05% diesel (wholesale) | R25.40 | R25.23 |
0.005% diesel (wholesale) | R25.53 | R25.34 |
Coastal | July official | August Expected |
---|---|---|
95 Petrol | R26.09 | R25.86 |
93 Petrol | R25.66 | R25.33 |
0.05% diesel (wholesale) | R24.75 | R24.58 |
0.005% diesel (wholesale) | R24.89 | R24.70 |