CAPE TOWN – South Africa’s fuel prices are adjusted on a monthly basis, informed by international and local factors.
International factors include the fact that South Africa imports both crude oil and finished products at a price set at the international level, including importation costs, such as shipping costs.
The main reasons for the fuel price adjustments are due to:
1. The contribution of the rand/dollar exchange rate
The rand depreciated, on average, against the Dollar – from R13.90 to 14.90 a dollar – during the period under review when compared to the previous one. This led to a higher contribution to the basic fuel prices on petrol by about 50 cents a litre (c/l) and diesel and illuminating paraffin by about 52c/l.
2. The increase in the prices crude oil
The average Brent Crude oil price increased from $74.25 to $78.25 a barrel during the period under review. The main contributing factors were the (a) unwillingness by Opec to increase their production outputs; and (b) negative impact of the hurricanes on petroleum infrastructure in the US during the period under review. Furthermore, the looming sanctions against Iran oil exports by the USA will put more pressure on the crude oil prices.
3. Import prices of Petroleum Products
The international prices of petroleum products increased on average during the period under review. This was in line with the higher crude oil prices and the weaker rand against the dollar.
The current fuel price adjustments are due mainly to the international factors, namely, the weaker rand and higher crude oil prices. Geopolitical tensions are having a very negative impact on crude oil prices and consequently refined product prices globally.
Based on current local and international factors, the fuel prices for October 2018 will be adjusted as follows:
- Petrol (93 Octane, ULP and LRP): 99c/l increase;
- Petrol (95 Octane, ULP and LRP): 100c/l increase;
- Diesel (0.05 percent sulphur): 124c/l increase;
- Diesel (0.005 percent sulphur): 124c/l increase;
- Illuminating Paraffin (wholesale): 104c/l increase;
- SMNRP for IP: 139c/l increase;
- Maximum LPGas Retail Price: 179c/kg increase.