MOTORISTS face another fuel hike this week as the price of petrol is adjusted for October.
The price of 93 Octane will increase by 25 cents a litre, 95 Octane by 29 cents a litre, Diesel by 42 cents a litre and paraffin by 39 cents a litre on Wednesday, 4 October.
According to a media release by the Department of Energy South Africa’s fuel prices are adjusted on a monthly basis, and are based on international and local factors.
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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 costs.
The department said the main reasons for the fuel adjustment was the Rand/Dollar exchange rate.
The average R/$ exchange for September 2017 was 13.08 compared to 13.21 in August 2017. In other words, the average R/$ was lower in September when compared to August. This contributed to the lowering of the Basic Fuel Prices of all petroleum products by less than 4.00 cents per litre.
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A second contributing factor to the fuel hike is that international prices of petroleum products increased during the period under review.
This was in line with higher crude oil prices. However, the diesel prices rose faster than the prices of petrol due to sharp decrease in diesel stocks in the US. The petrol prices were very strong through August due to the impact of Hurricane Harvey.
Higher oil prices were also a factor. The oil prices increased by 12 per cent since the beginning of September 2017, this was mainly due to, the improved compliance on production freeze by OPEC countries, the evidence that US drilling activity and production is not rising as was expected, and the fact that stocks of crude oil in the US are falling faster than anticipated.
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