Photo by: Bloomberg
Both 93 and 95 unleaded petrol (ULP) and lead replacement petrol (LRP) are going to cost an additional 75c/ℓ from February 7.
The cost of diesel is also going to increase. For 0.05% sulphur diesel, consumers can expect to pay an additional 73c/ℓ at the pumps and for 0.005% sulphur diesel an extra 70c/ℓ.
Wholesale illuminating paraffin will also increase in price by 53c/ℓ , while the single maximum national retail price of illuminating paraffin will go up by 71c/ℓ . Additionally, the maximum liquefied petroleum gas (LPG) retail price will rise by 37c/kg.
Mineral Resources and Energy Minister Gwede Mantashe said on February 5 that the monthly fuel price adjustments were based on current local and international factors.
International factors include that South Africa imports both crude oil and finished products at a price set at the international level, including importation costs.
One of the key reasons for the price increase was that the average Brent Crude oil price increased from $77.35/bbl to $82.03/bbl. These higher oil prices are attributed to the impact of the geopolitical risk of attacks on oil cargoes in the Middle East, particularly on the Red Sea.
This has caused an increase in shipping rates as vessels are rerouted from the Middle East to Europe, using the longer and more expensive route around Africa instead of the Suez Canal, since they cannot import from Russia owing to ongoing sanctions.
The oil price was also impacted on by the cold weather that affected production in the US, which has recently been part of the output used to offset the production cuts by the Organization of the Petroleum Exporting Countries. This resulted in more than expected inventory draws.
Additionally, the average international product prices of petrol, diesel and illuminating paraffin increased in line with the higher crude oil prices. LPG prices increased owing to higher freight costs.
These factors led to higher contributions to the basic fuel prices of petrol, diesel and illuminating paraffin by 68.50c/ℓ , 66.02c/ℓ and 46.17c/ℓ , respectively.
Another factor was that the rand depreciated slightly on average against the dollar from R18.66 to R18.77 during the relevant period. This led to higher contributions to the basic fuel prices of petrol, diesel and illuminating paraffin by 6.86c/ℓ , 7.41c/ℓ and 7.54c/ℓ, respectively.
Lastly, the cumulative slate balance on petrol and diesel at the end of December 2023 had a positive balance of R1.1-million. Therefore, Mantashe said there would be no slate levy implemented in the price structures of petrol and diesel with effect from February 7.