The alleged assassination attempt on former US President Donald Trump over the weekend has introduced new uncertainties into the global market, and is expected to have some impact on South African petrol prices.
While mid-month data from the Central Energy Fund (CEF) had previously shown stable fuel prices for August, the geopolitical shockwaves of the alleged attempted hit on Trump could alter these projections.
Expected petrol price changes for August
As of mid-July, the CEF data predicted minimal changes in fuel prices for the upcoming month.
Petrol prices were expected to see a slight decrease, with Petrol 93 dropping by 5 cents per litre and Petrol 95 by 8 cents per litre.
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Also, diesel prices were expected to rise slightly, with diesel 0.05% (wholesale) increasing by 1 cent per litre and Diesel 0.005% (wholesale) by 15 cents per litre.
Illuminating paraffin was also expected to see an 8-cent increase per litre.
These adjustments were based on a period of stabilisation in global oil prices following several months of decline.
However, the recent attempt on Trump’s life has now brought on a degree of uncertainty into the markets that may upset this stability.
Market reactions and implications
The alleged assassination attempt on Trump has echoed through the financial markets, leading to a surge in the value of the US dollar against other currencies.
The uncertainty surrounding the event has caused speculation about Trump’s potential return to the political arena, with some betting on his chances of winning a second term as president.
This speculation has strengthened the dollar, as investors seek safe-haven assets amidst the geopolitical turmoil.
In South Africa, early trading on Monday mirrored the conditions seen at the close of the previous week.
However, the added uncertainty from the attempted assassination means that market conditions could shift significantly before the end of the month.
The stronger dollar could lead to higher import costs for crude oil, which would, in turn, affect local fuel prices.
Potential scenarios for South Africa
Should the US dollar continue to strengthen, South Africa might see an increase in fuel prices despite the initial CEF projections.
A stronger dollar typically means higher costs for imported goods, including crude oil, which could cancel out the expected decreases in petrol prices and exacerbate the increases in diesel and paraffin prices.
South Africa, which heavily relies on oil imports, is particularly vulnerable to such volatility. The situation remains uncertain, and the actual impact on petrol prices will depend on how the geopolitical situation evolves in the coming weeks.