According to the latest data a substantial increase in fuel prices, effective Wednesday, 7 February 2024, was announced by the Mineral Resources and Energy Minister, Gwede Mantashe.
The adjustment in fuel prices for February reveals a hike in both petrol and diesel costs.
As a result, consumers will now face an additional 75 cents per litre for both grades of unleaded petrol (93 and 95), while the wholesale price of diesel is set to rise between 70 and 73 cents. The wholesale price of illuminating paraffin is also subject to an increase of 53 cents per litre, and the maximum retail price for LP gas will see a 37 cents per kg hike.
The Department of Mineral Resources and Energy provided insight into the country’s adjusted prices, considering both 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, for example, shipping costs,” the department explained.
The primary reasons cited for the fuel price adjustments are the escalating cost of the average Brent Crude oil, which rose from US $77.35 to US $82.03 in the past month. The department also attributed higher oil prices to geopolitical risks or attacks on oil cargoes in the Middle East, particularly the Red Sea.
“This has caused an increase in shipping rates as ships are rerouted from the Middle East to Europe, using the longer and more expensive route around Africa since they cannot import from Russia,” added the department.
Additionally, cold weather is impacting production in the United States. This has recently contributed to offsetting production cuts by a larger group of the Organisation of the Petroleum Exporting Countries (OPEC+), which has led to more than expected inventory draws, according to the department.
Meanwhile, the average international product prices of petrol, diesel, and illuminating paraffin increased in tandem with higher crude oil prices, with the rand/US dollar exchange rate also playing a role.
“The cumulative slate balance on petrol and diesel at the end of December 2023 had a positive balance of R1.1 million. Therefore, there will be no slate levy implemented in the price structures of petrol and diesel with effect from the 7th of February 2024,” concluded the department.
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