The Department of Mineral Resources and Energy (DMRE) announced the adjustment of fuel prices based on current local and international factors with effect from July 4.
According to statements issued by the DMRE, the fact that South Africa imports crude oil and completed goods at a price determined internationally, including importation charges like transportation costs, is one example of an international factor.
Further, in line with the Working Rules to determine the Basic Fuels Prices (BFP), the 95 octane (unleaded) grade is the price-marker grade and the BFP-differential between 95 and 93 octanes is adjusted on the first Wednesday of each quarter.
The fuel price adjustments are due to that the average Brent Crude oil price decreased from 82.98 US Dollars (USD) to 82.24 USD per barrel, during the period under review. The main contributing factors are the increased production by the US and other non-OPEC countries amid slow economic growth globally.
The average international product price of petrol decreased following the lower Brent crude oil prices during the period under review. The movement in product prices has led to a lower contribution to the Basic Fuel Price (BFP) of petrol by 93.66 – 99.65 c/l, diesel by 17.55 – 23.80 c/l and illuminating paraffin by 16.87 cents per litre.
The rand appreciated slightly, on average, against the US Dollar (from 18.46 to 18.44 Rand per USD) during the period under review when compared to the previous one. This led to lower contributions to the Basic Fuel Prices of all products by about 1.50 cents per litre on all products.
The cumulative slate amounted to a negative balance for petrol and diesel of R1.15 billion at the end of May. In line with the provisions of the Self-Adjusting Slate Levy Mechanism, a slate levy of zero cents per litre will be applicable in the price structures of petrol and diesel with effect from July 4, which is a decrease of 4.38 cents per litre on the prices of both diesel and petrol.
