Fuel price downer: More pain at the pumps in September

Despite tentative predictions on Monday signalling South African fuel consumers could enjoy a rare breather in September, the Department of Mineral Resources and Energy (DMRE) seems to have different plans. 

The DMRE announced that from 1 September, the following prices of petrol, diesel, illuminating paraffin and gas will come into effect: 

• Petrol (93 ULP and LRP): 4 cents per litre increase
• Petrol (95 ULP and LRP): 4 cents per litre increase
• Diesel (0.05% sulphur): 15 cents per litre decrease
• Diesel (0.995% sulphur): 14 cents per litre decrease
• Illimuniating paraffin: 15 cents per litre decrease
• LP Gas retail price: 94 cents per kilogram increase

Why the increase?

The DMRE explained the Rand’s depreciation against the US Dollar, from R14.54 to R14.7 per USD), led to higher contributions to the basic fuel prices of petrol (13 cents) , diesel (12 cents) and paraffin (12 cents). 

Brent Crude oil prices decreased slightly, which analysts said was due to reduction of positions by traders amid weak demand. Travel restrictions due to the Delta variant of Coid-19 also contributed to concerns. 

The moment in international refined petroleum product prices also led to decreasing crude oil prices. 

An increase of 8.78 cents per litre will also be implemented into petrol and diesel price structures, which the department said was in line with self-adjusting slate mechanism rules, effective from Wednesday.

A 5.7 cent per litre increase in petrol price structures was also realised, owing to wage increases for employees. This, the DMRE said, was in line with the Motor Industry Bargaining Council agreement. 

Previous predictions

The Automobile Association (AA) on Monday predicted fuel prices would drop.

ALSO READ: Prices of all grades of fuel set to drop in September – AA

The AA was commenting on unaudited month-end fuel price data released by the Central Energy Fund.

According to the association’s outlook for September, petrol would have dropped by around 11 cents a litre, diesel by up to 21 cents a litre, and illuminating paraffin by around 12 cents.

In August, 95 octane petrol cost R18.30 per litre, while a litre of 93 octane cost R18.11. 0.05% sulphur diesel cost R15.64 in August, 0.005 sulphur diesel cost R15.64 and illuminating paraffin cost R9.60.

However, it too expressed concern over the weakened Rand against the US dollar in August, meaning that South African fuel users will not enjoy the whole benefit of the lower oil price.

Compiled by Nica Richards