Fuel prices are expected to spike in April - but it appears that some customers are already paying above market averages for diesel.
Image: Newspress
Although petrol and diesel prices are currently at four-year lows, the conflict in the Middle East means South Africans are likely to see record increases from next Wednesday, April 1.
However, some fuel stations appear to be selling diesel at significantly higher-than-average prices.
A viral video posted by IOL’s sister publication, The Post, appears to show diesel being sold for R29.85 at a station in Umhlatzana, Durban.
While this would not be possible with petrol, given that this fuel’s retail price is regulated, diesel prices are not directly fixed by government in the same way as petrol, allowing more pricing flexibility for retailers.
The wholesale price of 50ppm diesel is currently listed at R17.84 at the coast, and R18.60 in the inland regions, and retail and wholesale markups are usually in the region of R2 to R3 combined, meaning diesel would typically be expected to retail for around R21.60.
However, it’s usually not simply a “free for all” for fuel stations as factors such as market dynamics, competition and brand pricing policies usually “indirectly” regulate diesel prices.
A viral video circulated on Saturday evening, shows a fuel station in Umhlatuzana, Durban, selling diesel for approximately R29,85.
Image: Video screengrab
Notwithstanding that it could have been a pricing error, market dynamics could also have played a role here. While there is currently no confirmed nationwide diesel shortage in South Africa, there have been reports of some stations running out of diesel temporarily.
IOL has reached out to Engen for commentary on the viral video, and this story will be updated as soon as a reply is received.
While the fuel station in the video may be seen as jumping the gun, South Africans are facing massive fuel price hikes from the beginning of April.
The latest data from the Central Energy Fund (CEF) is pointing to petrol price increases of up to R5.41 next month, with diesel increasing by up to R9.06, and that number could still grow if oil prices remain at current levels.
Global oil prices continued to trade at elevated levels on Monday, with Brent Crude hovering around the $109 mark, amid escalating tensions between the US and Iran over the Strait of Hormuz.
Recent threats made by US President Donald Trump, who has given Iran 48 hours to reopen the Strait or face significant energy infrastructure damage, have rattled markets.
Meanwhile, the International Energy Agency has warned that the situation poses a “major threat” to the global economy, with potential ripple effects including higher inflation, tighter monetary policy and risks to global food security.
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