Diesel Prices Set to Soar as Middle East Tensions Escalate

South Africa's fuel price respite appears to be ending as renewed Middle East hostilities push international oil markets and threaten a sharp rise in diesel prices in August.

The Central Energy Fund's month-end data shows that petrol prices may remain unchanged, but diesel customers face increases of between R1.75 per litre for 50ppm and R1.91 per litre for 500ppm.

The Slate Levy, which compensates fuel companies for prior-month oil price volatility, is currently set at R1.14 per litre and could allow for a more substantial petrol price cut if it's reduced significantly.

International oil markets have been volatile this month as traders alternated between fears of a Middle East supply shock and hopes for diplomatic restraint, with prices rising above $100 per barrel amid an escalation that included the US and Iran exchanging fire and concerns over flows through the Strait of Hormuz.