Fuel price latest: Brent crude oil above $110 per barrel and climbing

In another twist and possible impact on the fuel price in South Africa, Brent crude oil broke above $110 a barrel on Wednesday.

Brent crude oil hike

Ukraine invasion

The price per barrel increased by 4.88% in the space of a few hours. Meanwhile, the WTI (West Texas Intermediate, the benchmark crude for North America) was up more than 5%.

This follows after Russia’s invasion of resource-rich Ukraine threatens supplies, and resulted in both Brent Crude oil and the WTI reaching an all-time high since 2014.

Russia is the world’s third-biggest oil producer and the price per barrel skyrocketed after the world imposed strict sanctions on Moscow.

Worldwide lockdowns

However, it should be noted that oil prices were already fluctuating before Russia declared war, mostly due to supply constraints following worldwide lockdowns.

Speaking to Bloomberg TV, Uma Pattarkine of CenterSquare Investment Management said the “market was looking at anywhere up to seven rate hikes” in 2022.

Meanwhile, President Joe Biden in his State of the Union address said the United States would release some 60 million barrels to “temper” the crude oil price hike.

Key figures on Wednesday

As of 5am South African Standard Time, the Brent North Sea crude was up by 5.6% per barrel, now trading at $110.87, while the WTI was up by 5.7%, trading at $109.22 per barrel.

In Tokyo, Nikkei 225 was down 1.9% while the Hang Seng Index in Hong Kong was down by 0.9%.

The implementation of the Self-Adjusting Slate Mechanism rules – effective from 2 March 2022 – and the Rand/US Dollar exchange rate also impacts the South African fuel price.   

Fuel price in SA

“The combined cumulative Slate balances of petrol and diesel amounted to a negative R5.102 billion at the end of January 2022”, the DMRE said in a statement.  

The Rand appreciated slightly, on average, against the US Dollar (from 15.51 to 15.23) Rand per USD during the period under review when compared to the previous one.  

As of 2 March, the fuel prices will be adjusted as follows:

• The price of petrol (both 93 and 95 ULP & LRP) will increase by R1.46/l,  
• Diesel (0.05% sulphur) will increase by R1.44/l,  
• Diesel (0.005% sulphur) will increase by R1.48/l, 
• Iluminating paraffin (wholesale) by R1.21/l,  
• Maximum LPGas retail price by 70 cents/kg.