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Fuel prices to be hiked on Wednesday

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The Department of Energy says the price of both petrol and diesel will rise in January.

File picture: Reuters/Rupak De Chowdhuri

SOUTH African motorists will pay more for their fuel as both petrol and diesel prices will increase on Wednesday.

The Minister of Mineral Resources and Energy Gwede Mantashe, announced this adjustment of fuel prices in a statement on Monday, saying that the increases were based on current local and international factors.

The price of 93 octane petrol will increase by 43 cents per litre and that of 95 petrol will increase by 40 cents per litre.

Diesel (0.05 percent sulphur) will increase by 55 cents per litre, while diesel (0.005 percent sulphur) will increase by 54 cents per litre.

Illuminating paraffin at wholesale will also increase by 55 cents per litre.

The Maximum LP Gas retail price will increase by 44 cents per kilogram.

South Africa’s fuel prices are 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 shipping and importation costs.

According to the Department of Mineral Resources and Energy’s statement, there were three main reasons for the fuel price adjustments, including the contribution of the rand/US dollar exchange. The rand appreciated on average against the US dollar (from 15.17 to 14.93 rand per USD) during the period under review when compared to the previous one. This led to lower contributions to the basic fuel prices of petrol, diesel and illuminating paraffin by about 24 cents per litre.

The price of crude oil increased, with the average brent crude oil price increasing by almost 20 percent from $42.10 to $49.20 per barrel during the period under review. Crude oil prices continued to climb after the American Petroleum Institute (API) reported a crude oil inventory drawdown of 4.785 million barrels for the week ending on December 25, 2020.

The Petroleum Products Prices, regarding finished products, the movement in international prices of petrol diesel and illuminating paraffin increased by about 67.29, 80.01 and 79.82 cents per litre respectively during the period under review.

BUSINESS REPORT