South African motorists are facing a potentially painful start to September, with the latest fuel price data pointing to substantial increases for both petrol and diesel.

Figures from the Central Energy Fund (CEF) at the end of the third week of August show that fuel price under-recoveries have risen sharply again, wiping out much of the improvement recorded earlier in the month.

Petrol began August with an under-recovery of around R1 per litre. By the middle of the month, this had fallen to approximately 65 cents per litre. It has since climbed back to about 94 cents per litre.

Diesel has followed a similar pattern. The month started with an under-recovery of roughly R5 per litre before improving to around R2.80 per litre midway through August. It has now increased to approximately R3 per litre.

The latest figures indicate the following potential increases:

• Petrol 93: R0.83 per litre
• Petrol 95: R0.94 per litre
• Diesel 0.05% (wholesale): R2.87 per litre
• Diesel 0.005% (wholesale): R3.07 per litre
• Illuminating paraffin: R2.24 per litre

The deterioration has largely been driven by renewed pressure on international oil prices as tensions between the United States and Iran continue to disrupt the global energy market.

The conflict had appeared to be moving towards a peaceful settlement towards the end of June 2026, but the situation deteriorated again in July after negotiations broke down.

Iran subsequently closed the Strait of Hormuz and clashes intensified as the country confronted the US naval blockade.

Before the renewed conflict, oil prices had been moving below $70 a barrel as shipping activity through the strategically important waterway recovered.

The closure of the Strait reversed that trend, sending crude prices back towards the $100-a-barrel mark.

Although some vessels have continued passing through the waterway, easing some of the immediate pressure, oil prices remained elevated in the $80 to $90 range for several weeks.

Prices have now pushed higher again, approaching $94 a barrel, as the Trump administration prepares further economic measures against Iran, potentially including additional sanctions.

Bloomberg has reported that the US administration is expected to outline an “economic D-day” strategy targeting Iran next week.

The measures could extend beyond Iran itself and affect countries that continue trading with the Islamic Republic, potentially drawing China into the dispute.

China is the biggest buyer of Iranian oil, raising concerns that the latest measures could trigger another confrontation between Washington and Beijing and add further instability to global markets.

The effects of the conflict are being felt well beyond the Middle East, with South Africa also exposed through higher international energy costs.

Rand offers some relief

The rand remains one of the few factors providing some relief to South African motorists.

The stronger local currency has reduced the impact of higher crude prices, trimming the fuel under-recovery by roughly 13 to 19 cents per litre.

The rand is currently trading at around R16.05 against the dollar, once again testing the R16/$ level that it last moved beyond before the US-Iran conflict intensified.

The currency has shown considerable resilience this year, recovering losses recorded when the conflict first erupted and holding up despite continued volatility in international markets.

The rand received additional support this week after minutes from the US Federal Reserve's Open Market Committee meeting highlighted concerns about inflation and potential upside risks.

Markets subsequently reduced expectations for further US interest-rate increases this year, putting pressure on the dollar and providing support for emerging-market currencies such as the rand.

South Africa's currency has also benefited from stronger domestic economic fundamentals and favourable commodity prices. Gold, in particular, has continued to strengthen and is on track for another weekly gain.

However, the rand's performance is not enough to counter the sharp increase in international oil prices.

Unless crude prices fall substantially or the rand strengthens further, the latest CEF figures suggest that motorists should prepare for significant petrol and diesel price increases when September's official fuel prices are announced.

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