After a modest reduction in June, the fuel price trend reversed and increased due to a geopolitically driven spike in international Brent crude oil prices, which more than offsets the gains made by the rand. Crude oil prices rose by 8.5% month-on-month (m/m) in June 2025 to US$69.36 per barrel, largely due to the Israel-Iran conflict. Fortunately, the 12-day war ended with a ceasefire that continues to hold.
The rand, meanwhile, strengthened to below the R18/US$ level and averaged R17.84/US$ during the review period.
According to the latest announcement from the Department of Mineral and Petroleum Resources, the prices of both petrol grades increased—by 55 cents per litre for 93 ULP and by 52 cents per litre for 95 ULP & LRP. Similarly, diesel prices rose by 82 cents and 84 cents per litre for the 0.05% and 0.005% sulphur grades, respectively.
For the agriculture sector, this is unwelcome news, as fuel constitutes a significant portion of distribution costs for commodities such as fresh produce, livestock, and grain—both locally and for export markets. For example, fuel accounts for approximately 10% of the variable costs associated with grain and oilseed production.
Higher fuel prices could also complicate the consumer inflation outlook, which has remained within the South African Reserve Bank’s (SARB) target range for an extended period. However, this fuel price increase may be short-lived, considering the rand’s recent performance—reaching a high of R17.60/US$—and a decline in Brent crude oil prices to below the June peak, now sitting at US$67.68 per barrel. This comes as OPEC+ increases output and US crude inventories remain elevated.
