SA facing record diesel price as fuel prices increase on Wednesday

The Department of Mineral Resources and Energy (DMRE) announced that the price of both grades of petrol, 93 and 95 octane, will increase by 51 cents per litre from Wednesday, 2 November.

The prices of diesel will increase by R1.43 per litre, which means that it will cost R25.49 a litre in Gauteng. This is a new high for the price of diesel in South Africa.

Meanwhile, illuminating paraffin will now cost R1.03 more per litre, while the price of LP gas decreases by R0.98 cents per kilogramme.

Reason for increases

The department’s spokesperson Robert Maake said there are several international and local factors that contributed to the increase.

“The reason for this fuel price adjustment are the high oil prices and the weaker rand versus the US dollar which led to high prices of petrol, diesel and illuminating paraffin.”

Brent Crude price

The department said the average Brent Crude oil price increased from 89.79 US Dollars (USD) per barrel to 92.41 USD per barrel during the period under review.

“China’s announcement to ease covid restrictions which resulted in higher crude oil prices. OPEC+ reduction of oil production and a perceived risk of oil shortage also pushed prices higher.

“However, the continued release of crude oil stocks by the US to supplement tight supply, slow economic growth fears due to anticipated future interest rate hikes to curb inflation, offset the increasing trend of crude oil prices,” the department said.

Rand/Dollar

The department also said the Rand depreciated on average against the USD, (from 17.55 to 18.11) Rand per USD, during the period under review when compared to the previous one.

“The continued anticipation of higher interest rate hikes has resulted in the Dollar remaining stronger than other currencies. The weaker Rand led to higher contributions to the Basic Fuel Prices of petrol, diesel and illuminating paraffin by 37.55 c/l, 52.19 c/l and 48.02 c/l respectively.”

Slate levy

“The slate levy also decreased by R0.14 cents per litre in both price structures of both petrol and diesel,” Maake said.

“The negative slate balance on petrol and diesel amounted to R 8.12 billion at the end of September 2022. A decrease of 13.14 c/l (from 83.28 c/l to 70.14 c/l) will be implemented into the price structures of petrol and diesel in line with the Self-Adjusting Slate Mechanism rules effective from the 2nd of November 2022,” the department added.

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