Transporters will have to fork out more at the pumps for diesel when the latest fuel price increase comes into effect on Wednesday, 5 July.
According to the latest fuel price adjustments announced by the Minister of Minerals and Energy, Gwede Mantashe, in a statement on Monday, the price of diesel will rise between 12 and 18 pence per litre, while the price of petrol will decrease by between 17 to 24 pence per litre.
South Africa's fuel prices are adjusted monthly, informed by international and local factors.
International factors include the fact that South Africa imports crude oil and finished products at a price set at the international level, including importation costs.
The main reasons for the fuel price adjustments are due to crude oil price movements, the international petroleum product price, and the rand/US dollar exchange rate.
"The average Brent Crude oil price decreased slightly from 75.90 to 75.10 USD per barrel during the period under review. The main contributing factors are recession fears and an anticipated global economic slowdown," Mantashe said.
"As a result, the US Federal Reserve left interest rates unchanged earlier this month, however, warned of future increases. On the other hand, the European Central Bank and The Bank of England have increased interest rates due to these continued recession fears. This slower economic growth outlook has contributed to lower crude oil prices."
OPEC and Non-OPEC members' decision not to increase oil production cuts during their last meeting has also impacted price movements.
The average international product prices of petrol, diesel, and illuminating paraffin increased during the period under review, while the price of LPG decreased due to the driving season in the Northern Hemisphere and the rise in distillate prices at a higher rate than petrol due to tighter supplies. LPG prices decreased due to the decline in the prices of propane and butane.
"The movement in product prices has led to higher contributions to the Basic Fuel Price (BFP) of petrol 95ULP by 2.66 pence per litre, diesel 500ppm and 50ppm by 37.08 pence per litre and 31.33 pence per litre respectively, while the contribution to illuminating paraffin was 15.76 pence per litre. The contribution to BFP of 93 ULP was lower by 4.88 pence per litre," the minister said.
"The rand appreciated, on average, against the US Dollar (from 18.99 to 18.64) 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 19.77 pence per litre, 19.21 pence per litre, and 18.91 pence per litre respectively. The stronger rand affected petrol and Illuminating Paraffin prices positively, resulting in an overall decrease."
The prices for July 2023 will be adjusted as follows:
- Petrol (both 93 ULP and LRP): 24 pence per litre decrease
- Petrol (both 95 ULP and LRP): 17 pence per litre decrease
- Diesel (0.05% sulphur): 18 pence per litre increase
- Diesel (0.005% sulphur): 12 pence per litre increase
- Illuminating Paraffin: 4 pence per litre decrease
- Maximum LP Gas Retail Price: £2.96 per kilogram decrease
