Motorists to pay more at the pumps before the festive season

There is bad news in store for motorists this festive season after an announcement by the Department of Mineral Resources and Energy that the petrol price is set to increase by 22 cents a litre.

Both grades of petrol will see an increase. This includes 93 (ULP and LRP) and 95 (ULP and LRP).

According to the department, the increase will come into effect on Wednesday.

For motorists this means that a litre of 95 which costs R16,08, will increase to R16,30 per litre in Gauteng.

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Diesel (0.005 per cent sulphur) will see a drop of 16 cents a litre.

Illuminating paraffin (wholesale) prices will see an 18 cents per litre reduction. Illuminating paraffin (SMNRP) will drop by 24 cents a litre.

LP Gas will sell for a maximum retail price of 102 cents per kilogram, which is up from the previous price.

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After the announcement on Tuesday, the department said, “The main reason for the petrol price increases is that the average Brent crude oil price increased from US$59,72 to $62,68 per barrel during the period under review. The crude oil prices increased following signals of the extension of Organisation of the Petroleum Exporting Countries (OPEC) production cut into mid-2020, and signs of a new round of trade talks between China and the United States of America.”

The reason for the drop in diesel prices is as a result of the seasonal decline in demand and adequate refinery supplies.

“Furthermore, the weak domestic diesel demand in India pushed larger-than-usual diesel flows into the global market,” said the department.

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Both grades of petrol came down by 13 cents a litre in November  and  the price of petrol rose by between 18 and four cents a litre in October. In September, both grades of petrol rose by 11 cents.

The Automobile Association (AA) had expected the petrol price to decrease by 11 cents a litre.

“The rand/US dollar exchange rate has remained fairly flat throughout November, contributing around a six cent drop per litre. However, the prices of refined petrol and diesel, which usually track each other’s movements, but with a fair gap between their prices, have shown an altogether different picture recently.

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“This has led to the unusual situation where diesel is set for a quite substantial decrease of 23 cents a litre, while petrol will increase by 11 cents a litre,” the AA said.