Petrol prices set to increase tonight at midnight

The month is not gearing up to a good start for motorists, with the price of petrol set to increase as of October 2.

With the eighth consecutive fuel increase of the year set to be implemented at midnight, what can motorists expect to be paying for petrol and diesel?

The Energy Department announced the price of petrol (95 Grade) will increase by 18 cents per litre, whereas the price of 93 octane will decrease by four cents per litre. Diesel and paraffin will both see an increase of 25 cents per litre.

Why is there a decrease in the price of 93 octane, while the price of 95 octane is set to increase?

The Energy Department explains the price difference is because of a recalculation in the basic fuel price (BFP) for each category.

Regarding the working rules to administer the BFP, the differentials between 95 and 93 petrol grades are adjusted at the start of each quarter. Furthermore, the BFP differentials between 95 and 93 petrol grades have changed and therefore there are different price adjustments between the two grades.

Why is there an increase in both petrol and diesel?

The price for most grades of petrol and diesel is mainly a result of higher international petroleum product costs. This follows a higher oil price following the drone attacks on Saudi Arabia’s oil plants on September 14.

The attacks targeted the Abqaiq facility, the largest crude oil stabilisation plant in the world, and the Khurais oil field, the second-biggest oil field in Saudi Arabia. The attacks affected 5% of the world’s daily oil production.

While the drone attacks had a negative impact on fuel prices, the Rand appreciated against the US dollar during the respective period, which had a more positive impact on the fuel prices.

However, irrespective of the positive impact the Rand had on the petrol prices, motorists will now need to tighten their budgets as they brace themselves for tomorrow’s increase.

Be sure to fill your motor vehicles today before the new prices officially kick in.

Also read: Will the government implement a petrol price cap?