Minister Gwede Mantashe Unveils Fuel Price Adjustments
In a significant development, the Minister of Mineral Resources and Energy, Mr. Gwede Mantashe, has unveiled the latest adjustments to South Africa’s fuel prices, set to take effect from the 6th of September 2023. Moreover, these adjustments come as a response to a complex web of international and local factors that significantly influence the nation’s fuel prices.
Monthly Adjustments Informed by Global and Local Factors
South Africa’s fuel prices undergo monthly adjustments, with international and local variables meticulously determining these changes.
On the global stage, South Africa depends on importing both crude oil and finished products and these international market dynamics, including shipping costs and importation expenses, influence these imports.
Key Reasons Behind the Fuel Price Adjustments
The primary factors driving these adjustments can be summarized as follows:
1. Crude Oil Prices
One of the primary drivers is the surge in crude oil prices. The average price of Brent Crude oil has climbed from $79.75 USD to $84.78 USD due to a decrease in supply, primarily attributed to production cuts by Saudi Arabia.
2. International Petroleum Product Prices
The prices of international petroleum products, including petrol, diesel, illuminating paraffin, and LPGas, have experienced an uptick during the review period. The key factors contributing to these increases are:
a) Petrol: The high prices of petrol are linked to low inventories and refinery outages, affecting the production of components used in the creation of summer-grade petrol, thus driving up production costs.
b) Diesel and Paraffin: Both experienced price hikes due to decreased shipments of Russia’s Urals crude oil, which contains middle distillates, and a rise in demand for middle distillates in preparation for the winter season in the Northern Hemisphere.
c) LPGas: LPGas prices increased due to elevated prices of Propane and Butane.
These factors led to significant increments in the Basic Fuel Prices of petrol, diesel, and illuminating paraffin.
3. Rand/US Dollar Exchange Rate
The South African Rand depreciated against the US Dollar during the review period, contributing to higher Basic Fuel Prices for petrol, diesel, and illuminating paraffin.
4. Slate Levy Implementation
As of the end of July 2023, the slate balance for petrol and diesel had a positive balance of R1.3 million, leading to the absence of a slate levy in the petrol and diesel price structures for September 2023.
5. Annual Wages Adjustment for Forecourt Staff
The Minister of Mineral Resources and Energy approved a 5.0 c/l increase in the price structures of petrol to accommodate the wage increase for Forecourt employees in line with the Motor Industry Bargaining Council (MIBCO) Agreement. This wage increase will be implemented from the 6th of September 2023.
Fuel Price Adjustments for September 2023
Based on the prevailing local and international factors, the fuel prices for September 2023 will be adjusted as follows:
- Petrol (both 93 and 95 Octane): An increase of one hundred and seventy-one cents per litre (171.00 c/l).
- Diesel (0.05% sulphur): An increase of two hundred and eighty-four cents per litre (284.00 c/l).
- Diesel (0.005% sulphur): An increase of two hundred and seventy-six cents per litre (276.00 c/l).
- Illuminating Paraffin (wholesale): An increase of two hundred and seventy-eight cents per litre (278.00 c/l).
- SMNRP for IP: An increase of three hundred and seventy cents per litre (370.00 c/l).
- Maximum Retail Price of LPGas: An increase of two hundred and twenty-six cents per kilogram (226.00 c/kg).
Publication of Fuel Prices Schedule
We will publish the detailed fuel prices schedule for various zones on Tuesday, the 5th of September 2023, offering consumers comprehensive information about the upcoming changes.