Energy

Complete U-turn for petrol prices in South Africa

Staff Writer

 ·24 Aug 2026

Petrol price recoveries have done a complete U-turn and are now back to where they started at the beginning of August.

Petrol price recoveries started the month on the back foot, showing an under-recovery of R1 per litre as the July reignition of the US-Iran war filtered through oil markets.

While the conflict flared up and the Strait of Hormuz was shut down, markets held onto some hope as some shipping through the passage continued.

There was also a persistent hope that both the US and Iran would ultimately negotiate a lasting peace in the region.

This was reflected in the global oil price, which swung from $100 per barrel when the war restarted to around $80 per barrel as tensions eased.

This led to a concomitant reduction in the under-recovery in local petrol prices, which, at one point, had halved to around 50 cents per litre.

This sparked hope for recoveries to end neutral for the month, sparing motorists from a hike at the pumps in September.

However, hopes faded as, contrary to easing tensions and ending the war, the United States escalated matters last week by threatening to add further sanctions against Iran to the mix.

This sent oil prices back to around $95 a barrel—far higher than the $83 per barrel levels at the start of the month.

As a result, recoveries have moved in the wrong direction, and any gains made in August have been all but wiped out.

The latest data from the Central Energy Fund shows that petrol prices are now at an under-recovery of 99 cents per litre, the same R1 level as at the start of the month.

The table below outlines the recoveries at start, mid and month-to-date.

Petrol 95 price path

Petrol 93 price path

There are at least two saving graces in the data.

While diesel prices are still at a steep under-recovery of around R3 per litre, this is a better position than at the start of the month.

Diesel recoveries have not followed the same U-turn path as petrol recoveries.

The second saving grace is the rand, which is trading stronger against the dollar and sitting extremely close to the R16/$ resistance level.

The rand was trading below R16/$ before the US-Iran War and has been fairly resilient since the war’s eruption. A move below R16/$ would effectively put the unit back in pre-war graces.

The stronger rand is currently working against oil price pressures, reducing the under-recovery by around 15 cents per litre.

United States threatens sanctions

US Treasury Secretary Scott Bessent is expected to announce a fresh set of economic measures against Iran, as Washington pivots from strike threats to tougher sanctions as a way to end the nearly six-month war.

The US is striving to push Iran to accept an end to the war on its terms, having failed to do so with an extensive military campaign.

The Iranian economy is already under immense strain, with a US naval blockade severely curtailing crucial oil exports.

Iran’s currency weakened to an all-time low against the dollar, having fallen 4.5% since US President Donald Trump announced last week he was planning to escalate economic pressure on Tehran.

However, the move to apply fresh sanctions on Iran may lead to even wider geopolitical disruptions, with China stepping in.

China said that any US sanctions will only worsen tensions with Iran and won’t serve any side’s interests.

The nation, which buys the bulk of Iranian oil, will “take necessary measures to safeguard its legitimate rights and interests,” Chinese Foreign Ministry spokesman Lin Jian said.

With Bloomberg