JOHANNESBURG - Although late-month official data had implied that South African petrol prices would be reduced by around 11 cents a litre, the Department of Energy has announced a 4 cent increase for both grades of Unleaded, effective from Wednesday, 1 September.
It’s better news for those filling up with diesel, as the DOE has announced decreases of 14 cents for 50ppm and 15 cents for 500ppm.
What happened to the decrease?
According to the Automobile Association, the reason that the expected petrol decrease didn’t materialise is because the retail margins have been increased by 5 cents a litre, in order to accommodate a wage increase for fuel attendants, while the Slate Levy had seen an 8 cent hike. The AA said that this was only announced after the late-month data, which the original prediction had been based on, was published.
What you’ll pay from 1 September
Motorists face another month of record-high petrol prices, with 95 Unleaded now costing R16.62 a litre at the coast and R18.34 in the inland regions, where the less expensive 95 Unleaded will now sell for R18.15.
Had it not been for these factors and the rand’s depreciation during August, the price of petrol would have decreased by 24 cents and diesel by 36 cents. This is because the average Brent Crude oil price decreased last month, according to the Department of Energy. However, the rand depreciated, on average, from R14.54 against the US dollar to R14.77.
Softer oil prices
The AA said the softer oil prices came as a result of OPEC cutting production: "International petroleum prices continued their gradual retreat during August, having pulled back by around ten percent since the start of the month. We attribute this mainly to the Organisation of Petroleum Exporting Countries (OPEC) cartel, which increased oil production gradually during the first half until previous production restrictions were removed".
Brent Crude oil was trading at R71.63 at the time of writing, while the rand was listed at R14.43 to the dollar. Should these trends continue, a modest price cut could be on the cards for October, although a far bigger reduction would be necessary to take the current burden off motorists and commuters.