Brent Crude oil has plunged to around $78 per barrel, but many uncertainties still exist around the crucial Strait of Hormuz.
International oil prices have tumbled on news that the US and Iran are set to sign a two-month truce on June 19, paving the way for talks on a permanent peace deal, but those expecting South African fuel prices to return to their pre-April levels have a long wait ahead of them.
While the price of Brent Crude oil tumbled to three-month lows of around $78 this week following the announcement, it remains somewhat higher than the $69 average that determined our fuel prices in March, which was the last ‘normal’ month for consumers. As an unpleasant reminder, between April and June, diesel rose by up to R10.16, and petrol by R7.72.
Another significant factor is that South Africa’s Treasury intervened with a R3 temporary tax reprieve in April, which was halved in June, while July will see the measure fall away completely.
Thankfully, even before the truce was announced, oil was tracking lower than in the previous month, and as a result, some healthy over-recoveries have developed on both petrol and diesel, according to the latest snapshot received from the Central Energy Fund (CEF).
