Motorists can expect an increase in petrol prices on Wednesday.
The Department of Energy says Petrol is set to increase by 29 cents a litre of 93 unleaded petrol.
And leaded petrol will increase by 26 cents a litre.
Diesel will see an increase of 42 cents and illuminating paraffin by 36 cents.
Petrol and diesel prices are largely determined by the oil price, as well as rand strength, given that South Africa must buy oil in the US dollar.
By Shamiela Fisher for EWN
The price of petrol goes up by a rand at midnight while diesel increases by between 63 and 65 cents a litre.
This record increase in the price of fuel will see them pay about R17 for a litre of petrol.
The mineral resources and energy ministry said it was due to crude oil prices, global petroleum product prices, the Rand/US Dollar exchange rate, as well as Fuel and Road Accident Fund Levies.
Eyewitness News spoke to a few motorists about the hikes.
“I’m definitely unhappy with the petrol hike. It’s obviously going to affect us in our homes,” said one motorist.
Another added that: “It’s affecting my pocket negatively as I need to travel to work.”
“This is one of my biggest expenses every month, so this would really negatively affect my financial situation,” said another motorist.
Meanwhile, trade union UASA said it was deeply concerned by the continuous fuel price increases.
In a statement on Tuesday, the union said: “[These increases leave the] workers in financial distress as they have to chip in more for their basic needs. The increase will be passed on to the consumer who will be forced to pay more for their basic needs.”
Source: Eyewitness News
The Energy Department has announced that the price of petrol will increase by 81 cents on Wednesday, 3 February.
Meanwhile, the price of diesel will rise by between 58 and 59 cents a litre and illuminating paraffin will cost 59 cents more a litre.
LPG will cost 193 cents more per kilogram.
Citing reasons for the prices increases, the Energy Department stated that the average international product prices for petrol, diesel and illuminating paraffin increased during the period under review.
“The rand depreciated against the US dollar during the period under review, on average, when compared to the previous period. The average rand/US dollar exchange rate for the period 31 December 2020 to 28 January 2021 was 15.0872 compared to 14.9391 during the previous period.”
By Tom Head for The South African
For the third month in a row, the petrol price has decreased in South Africa. March will see the following substantial changes to fuel costs.
A substantial drop for both the diesel and petrol price in South Africa has put our motorists in a good mood at the start of March.
Confirmed petrol price for March 2020
Petrol getting cheaper, but so is diesel and illuminating paraffin:
- Petrol: Decrease of 19 cents per litre
- Diesel: Decrease of 54 cents per litre
- Paraffin:Decrease of 68 cents per litre
Subtracting these totals from February’s fuel price gives us the following average cost-per-litre for petrol and diesel. These prices will take effect from Wednesday 4 March:
- Inland petrol price – R15.84
- Coastal petrol price – R15.07
- Inland diesel price – R13.49
- Coastal diesel price – R14.03
Why is the petrol price dropping in March?
There are, as ever, two major factors at play. However, it’s the global oil price trends that have accounted for this slashing of fuel costs. The outbreak of the coronavirus has left international markets spooked, and the demand for oil has subsided. The decrease would have been more, if not for the Rand’s weak monthly performance against the US dollar. Despite a brief rally this week, ZAR is still floundering.
The honeymoon period is unlikely to last through to April, however. It was announced during February’s budget speech that taxes on fuel would be rising, making petrol prices more expensive.
The price of petrol at the pump is set to rise by 74 cents a litre from 6 March.
The wholesale diesel price to rise by 91 cents a litre.
The Energy Department’s Robert Maake explains why prices are being increased.
“The main reason for this big increase is mainly the crude oil price. It was much higher during the current review period compared to the previous period. The Brent crude oil was around $34 per barrel while in the previous period it was around $16 per barrel.”
The Automobile Association’s Layton Beard says consumers will be hit hard in the coming months.
“The general fuel levy and the Road Accident Fund levy will be added to the fuel price in April. That is apart from what adjustment is made to the basic fuel price. And obviously, in June, there’s the addition of the carbon tax we have to wait and see on a day-to-day basis how those numbers pan out.”
This is the second consecutive increase in fuel price this year.
Following a fuel price roller coaster in 2018, in which prices finally subsided meaningfully towards the end of the year, South African motorists can look forward to some price stability, at least for the next month.
According to the Automobile Association, the price of petrol is likely to increase by around eight cents a litre, while diesel is set to go down by three cents and illuminating petrol by nine cents. This prediction is based on late-month, unaudited data released by the Central Energy Fund.
This would push the price of a litre of 95 Unleaded petrol to R13.50 at the coast and R14.09 in Gauteng, with 93 Unleaded rising to R13.87 in the latter region.
While the rand has gradually appreciated against the US dollar in the past month, firming from around R14.50 to the dollar to current levels in the region of around R13.70, international crude oil prices edged higher, to hover around the $60 mark, although this is still well below the highs of around $84 recorded in October.
“What is worth noting is that the average rand strength against the US dollar has been increasing for nearly a month, and we are hopeful this may point to a period of greater stability for the currency,” the AA added.
“If international oil prices continue their current stable trend, South African fuel users may see fewer of the wild swings in fuel prices which characterised 2018.”
But don’t spend all those savings just yet. Last year showed us how volatile the fuel market can get.
By Tom Head for The South African
Has Santa Clause been listening to the South African public? A petrol price decrease of epic proportions is now certifiably on the cards for December, after the Central Energy Fund (CEF) released a new round of data.
Last week, we broke the news that the petrol price was likely to drop by more than R1.50 per litre. However, that figure may be nearer the R2 mark by the beginning of next month. Business Tech report that the rand’s gains against the dollar have propelled the costs into more affordable territory.
How much will the petrol price drop by?
All figures based on price per litre:
- Petrol 95: R1.67
- Petrol 93: R1.64
- Diesel: R1.14
- Illuminating Paraffin: R1.05
It’s been a hectic couple of months for the crude oil market, but one’s misfortune is another’s gain. The price for a barrel of oil has slumped to the $60 mark, compared with $85 in September. Donald Trump, this tweeter-in-chief, has even suggested oil prices could drop lower than this.
“The main driver of lower prices has been an accelerating decline in international oil prices, which have trended downwards since the beginning of this month,” said the Central Energy Fund in an official statement.
A perfect storm of positive factors for South Africa is leading us towards one of the most dramatic changes in monthly petrol prices ever seen in this country. It would be the ideal remedy to a year that has been infamous for soaring fuel costs, and October’s R1-per-litre increase.
It all makes for a pretty rosy picture heading into the end of 2018. Inland regions, such as Gauteng and Free State, will go from paying over R17 a litre to less than R15.50. Meanwhile, those near the coast will smash the R15 barrier altogether, as prices plummet even further.
What South Africans will pay for petrol in December 2018 – forecast:
- Inland: R15.41
- Coastal regions: R14.82
South Africans must expect another substantial petrol price increase at the beginning of November‚ the Automobile Association (AA) says.
Commenting on unaudited mid-month fuel price data released by the Central Energy Fund‚ the AA said: “International oil prices remain stubbornly high and it is possible that current tensions involving Saudi Arabia‚ one of the world’s biggest oil producers‚ could place more pressure on fuel prices. More welcome news is that the rand is working in SA’s favour‚ and the recent firming of our currency against the dollar has taken some of the bite out of oil’s rally.”
“However‚ the potential price hikes are still daunting‚ especially for diesel users,” the AA said.
Petrol prices are currently set for a 40c a litre increase‚ while diesel and illuminating paraffin could spike 70c and 65c a litre, respectively‚ the AA said.
The association said the predicted increase in the price of petrol must‚ for the moment‚ be seen against the backdrop of the department of energy’s proposal to set a maximum price for the sale of 93 octane unleaded petrol (ULP) and lead-replacement petrol (LRP) fuels.
“Should this happen‚ it will allow fuel retailers to set their own prices below the maximum amount indicated by government‚ and may‚ depending on the margins‚ ease the burden on users of the two identified fuels. It must be stressed‚ however‚ that we did not participate in the drafting of the proposal‚ so details on its possible implementation remain unclear to us‚” the AA commented.
However‚ the association said it welcomed the government’s efforts to tackle rising fuel prices‚ and that the department of energy had requested input from industry stakeholders. It said the proposal looked to be consumer-friendly‚ and that the detail would clarify how this would work once all the feedback was received.
The AA said the country could not continue to be hammered by large fuel price hikes without severe economic knock-on effects. Earlier in October, the price of unleaded 93 petrol increased by 99c a litre‚ unleaded 95 by R1 and diesel by R1.24.
“The effect on bus and taxi operations could lead to fare hikes that exceed commuters’ ability to pay‚” the AA noted. “We again call on government to prioritise economic policies that inspire investor confidence. A stronger and more stable rand is the country’s only defence against the vagaries of the international oil price.”
By Patsy Beangstrom for IOL
Residents can brace themselves for one of the highest fuel price increases as the cost of petrol smashes the R17 a litre mark from Wednesday.
Minister of Energy Jeff Radebe announced the adjustment of fuel prices for October on Monday.
Both grades of petrol, 93 and 95 (ULP & LRP), will increase by 99 cents and 100 cents a litre (c/* ) respectively from midnight on Tuesday night. This brings the overall retail price of 95 ULP for inland motorists to R17.08 c/* and R16.49 c/* at the coast.
The cost of diesel will go up by R1.24 a litre and illuminating paraffin (wholesale) by R1.04 cents a litre, while illuminating paraffin (SMNRP) will jump by R1.39 per litre. The maximum retail price of LP gas will increase by R1.79 per kilogramme.
The Department of Energy (DoE) said in a statement on Monday that South Africa’s fuel prices were adjusted on a monthly basis, informed by international and local factors.
“International factors include the fact that South Africa imports both crude oil and finished products at a price set at the international level, including importation costs, eg shipping costs.”
The department attributed the main reasons for the latest fuel price adjustments to the rand/US dollar exchange rate.
“The rand depreciated, on average, against the US dollar (from 13.90 to 14.90 rand per USD) during the period under review. This led to a higher contribution to the Basic Fuel Prices (BFP) on petrol by about 50.00c/* and diesel and illuminating paraffin by about 52.00c/* .”
A further contributing was the increase in the price of crude oil which went up from 74.25 USD to 78.25 USD per barrel.
“The main contributing factors were the unwillingness by the Organisation of Petroleum Exporting Countries (Opec) to increase their production outputs and negative impact of the hurricanes on petroleum infrastructure in the USA during the period under review. Furthermore, the looming sanctions against Iran oil exports by the USA will put more pressure on the crude oil prices.”
The Automobile Association (AA) on Friday warned that fuel users are facing unprecedented price increases in October that it described as “catastrophic” for road users.
The AA noted that the major culprit is the country’s economic policy which has left South Africans defenceless against upticks in international oil prices.
In September the DoE decided to intervene temporarily to provide some relief against fuel price hikes.
FNB Agric Business warned on Monday that the increase would place a further strain on consumers and hurt consumption growth.
“The South African Reserve Bank (Sarb) earlier indicated that household consumption has already fallen by 1.3% in the second quarter of 2018 as spending on goods declined, particularly durables which were down 11.2%,” Dawie Maree, head of marketing and information at FNB Agric Business, said yesterday.
“Small business and the poorer households will bear the brunt as their transport costs account for a large portion of household expenditure and the consequence of sustained fuel price increases will further erode disposable income and cause financial stress. This will force a change in spending patterns with a cut in spending on luxury items and frequency of visits to eateries.”
Maree stated that locals faced a dim festive season if the current pace of fuel price increases was sustained in the two months ahead.
“At producer level, the impact will be cost pressures as we head into the new planting season for summer crops. The higher crude oil price, which has now breached the US$80/barrel level, is a double whammy due to the direct influence on the fuel price and the indirect influence on oil derivatives such as fertiliser, pesticides and herbicides (agrochemicals) all of which are inputs in crop farming. This will squeeze profit margins if agriculture commodity prices do keep up with the pace of input cost increases.”
By Tom Head for The South African
You might have heard a few horror stories about the petrol price in South Africa soaring by R1 for next month. Well, we’re here to tell you it all seems completely true.
The AA forecast a rise of R1.12 per litre of petrol, and a whopping increase of R1.38 for diesel in October – a devastating blow that has been described as “the biggest single hike” in our country’s history. But what’s fuelling this crisis, and why are costs spiralling so dramatically? We’ve got answers.
Oil prices are nearing $100 a barrel
There’s a very bleak outlook for oil prices on a global scale. This is by no means a consolation, but it goes some way to explaining why it’s getting ridiculous in South Africa. It’s not just internal factors that have ramped up the petrol price. Some commentators believe oil prices will hit a 10-year high of $100 a barrel soon.
Tension between the US and Iran
It’s hard to accept, but the world tends to revolve around America at this point. While President Trump is taking a more hostile approach to foreign policy, Iran has become one of his targets. Now, the country is one of the biggest exporters of oil in the world, but there’s trouble on the horizon.
The US government are set to impose further sanctions on Iran while pulling out of an agreement regarding a nuclear deal achieved by the Obama Administration. Production is already dropping in the Middle-Eastern country, and further financial turmoil will have a negative effect on oil costs.
Countries not producing the goods
Energy Minister Jeff Radebe has highlighted that Libya produced 1.5 million barrels of oil a day before the regime collapsed in 2011. That number is now almost at a third of what it used to be.
Venezuela’s current crisis also got a mention. They are a member of the Organization for Petroleum Exporting Countries (OPEC), but the oil industry has all but collapsed in the South American state. To put it in laymen’s terms, production is down and the cost has gone up.
A weak rand value to the dollar
It’s been a nightmare month for the rand, which has had to battle against the fierce knockout blow delivered by the recession. With the financial crisis coming as something of a surprise, the rand plummeted against the greenback and has struggled to find its feet ever since.
It soared above the R15 mark, and only recently came back down to R14.40. Most recently, Turkey’s currency tanked as a result of Trump’s intense import tariffs, aimed at stimulating industrial growth within the US.
In a global market, for every action, there is a reaction, and all emerging economies felt the knock-on effect of Turkey’s wobble.
Government subsidy backfires
Have you ever tried to help a situation but only gone and made things worse? Well, that’s effectively what happened to Jeff Radebe last month. The minister announced that the government would subsidise fuel costs for the month of September, meaning that an increase in the petrol price was smaller than forecast.
However, what were we just saying about actions and reactions? The slight relief felt this month will be compounded by the misery said to be coming our way next week.
For petrol prices to rise by a rand within a 30-day period is sharp, shocking rise. Had there been no government intervention, there’d be less of a knock-on effect. October’s rise could have been as “little” as 50 cents per litre, had South Africans been allowed to pay the full whack in September.