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Motorists can bank on having to dig deeper into those wallets for fuel from Wednesday, 1 December 2021.
Mr Gwede Mantashe, Minister of Mineral Resources and Energy, has indicated that fuel prices will be adjusted based on current local and international circumstances.
According to the Department of Mineral Resources and Energy, South Africa’s petrol prices are modified monthly, based on worldwide and local considerations.
International factors include South Africa importing both crude oil and finished products at a price set at the international level, including importation costs, e.g. shipping costs.
What is the price of fuel for December 2021?
- Petrol (both 93 and 95 ULP & LRP): 81 cents per litre increase
- Diesel (0.05% sulphur): 72.50 cents per litre increase
- Diesel (0.005% sulphur): increase of 74.50 cents per litre
- Illuminating Paraffin (wholesale): an increase of 42.20 cents per litre.
The following are the major causes for the fuel price adjustments, according to the Department:
• The contribution of the Rand/US Dollar exchange rate.
When comparing the current period to the previous one, the Rand depreciated on average versus the US Dollar (from 14.72 to 15.85 Rand per USD). This resulted in an increase of almost 34.00 cents per litre in contributions to the Basic Fuel Prices of gasoline, diesel, and illuminating paraffin.
• The increase in the prices of crude oil.
The average Brent Crude oil price increased from 82.50 USD to 83.00 USD per barrel during the period under consideration.
The main reason is a stronger global demand recovery combined with a weaker supply reaction from non-OPEC and other oil producers.
There is a demand-supply mismatch, meaning more demand for oil goods than the market can supply. While OPEC and non-OPEC countries refuse to expand oil production to meet global recovery demand, the United States and other major oil consumers are coordinating efforts to try and lower high prices by releasing oil from their inventory reserves.
The US government’s release of millions of barrels of strategic oil reserves has had no effect on oil prices. Concerns about the new COVID version have dampened global oil consumption, resulting in lower oil prices.
• The Petroleum Products Prices
The rise in crude oil prices was followed by an increase in international refined petroleum product prices. This resulted in higher payments to the Basic Fuel Price of 1.50 c/l for petrol, 5.31 c/l for diesel, and 1.21 c/l for illuminating paraffin, respectively.
It is critical to recognise that global fuel prices are growing due to continuously high crude oil prices.
In numerous other countries, record gas prices have been observed. The Department is cognizant of the elevated worldwide gasoline prices’ inflationary nature and the impact on commuter transportation costs.
• RAS Industry Margins Annual Adjustments
The Minister of Energy approved a net rise of 17.84 cents per litre in yearly margin adjustments on petrol and a net increase of 8.20 cents per litre in diesel and illuminating paraffin wholesale prices, effective 1 December 2021, in accordance with the Regulatory Accounting System (RAS).
• Implementation of the Slate Levy
Following the Self-Adjusting Slate Mechanism guidelines, a rise of 26.30 cents per litre (from 15.36 cents per litre to 41.66 cents per litre) will be incorporated into gasoline and diesel price structures from 1 December 2021.
At the end of October 2021, the cumulative Slate balances of petrol and diesel totalled a minus R4.689 billion. Under the Self-Adjusting Slate Mechanism Rules, the Slate Levy is utilised to compensate the industry for cumulative under-recovery.
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