South African fuel prices decreased for the fifth month in a row on Wednesday, October 02, bringing petrol and diesel costs to their lowest levels since February 2022.
But this relief could be short lived if there are any further escalations in the current crisis in the Middle East, with international oil prices having surged by more than 5% on Tuesday and a further 1% on Wednesday.
Brent Crude oil futures rose to $74.56 per barrel on fears that rising tensions in the Middle East could disrupt crude output in the region, Reuters reported.
Iran-Israel tensions in the spotlight
This came after Iran fired 180 ballistic missiles on Israel on Tuesday. Although it said the attack was “over”, Israel said it would make Iran “pay” for the launch.
"The burning question is whether Iran's missile strike is a one-off response or the start of something much bigger. Most bets lean towards the former, especially with the US stepping in to back Israel," independent analyst Stephen Innes told AFP.
"Iran's oil infrastructure could very well be in their crosshairs. Taking a swing at Iran's oil lifeline could have far-reaching economic consequences, sparking a severe escalation," he added.
South Africa’s monthly fuel price adjustments are determined primarily by international oil prices as well as the rand exchange rate.
September’s fuel price cuts came as a result of the average Brent Crude oil price decreasing from $78.54 to $72.82 per barrel, and the rand strengthening from R18.05 to the US dollar to R17.68.
Should oil prices remain above the $73 mark, South African fuel costs will almost certainly rise in November.
IOL