South African motorists have once again witnessed one of the great wonders of modern economics: when oil prices go up, petrol and diesel prices sprint after them like a hungry cheetah. But when oil prices fall, pump prices suddenly develop a limp.
During the Iran conflict, Brent crude reportedly surged from around US$63 per barrel to over US$110, a jump of roughly 75%. Unsurprisingly, fuel-price panic followed immediately. Petrol and diesel increases were explained with grave faces, serious charts and the usual “international factors beyond our control”.
Then the music changed. As tensions eased, Brent fell sharply. By late June, it was trading around US$72.50 per barrel, meaning oil had dropped by about 34% from the war peak. Even better for South Africa, the rand did not weaken during this period — it strengthened. Reports placed it around R16.15 to R16.40/$, helped by lower oil prices, improved risk sentiment and easing geopolitical fears.
In plain language: imported fuel should have become much cheaper.
The Central Energy Fund’s figures confirmed this. Latest data pointed to over-recoveries of about R3.00/litre for petrol and up to R5.07/litre for diesel. In other words, the market was screaming: “Cut the price!”
Yet, as always, the pump-price relief appears slower, smaller and more reluctant than the original increase. Yes, fuel levies, regulated margins, slate adjustments and monthly averaging explain part of the delay. But they do not explain the recurring magic trick: fast increases, slow decreases.
The result is a widening gap between falling oil costs and what motorists keep paying. And where there is a gap, someone is cashing in.
Mineral oil companies may call it formula, timing or market mechanics. Motorists may prefer a simpler term: undeserved profit — politely served with a petrol nozzle and a smile.