Large petrol price increase expected

The next fuel increase is expected to be high due to the rand going through a bad patch and the introduction of new levies, the Energy Department said on Tuesday.

“The department will announce the increase next week, but at this stage it is speculative,” said spokesperson Bheki Khumalo of reports of an expected 50 cents per litre price rise.

However, due to fluctuation in the rand/dollar exchange rate, under-recovery will be at least 25 cents a litre for petrol and 23 cents a litre for diesel.

The petrol price is quoted in US dollars, and is influenced by international oil prices — which shift daily — the rand/dollar exchange rate and the supply and demand of the commodity.

According to the Energy Department’s website, the price paid at the pump includes the cost of transporting petroleum products to South Africa, insurance, agents’ fees, the cost of using harbour facilities to offload, and storage at terminals. Then there are inland transport costs, customs levies and retail profit margins.


Under-recoveries occur when the exchange rate is worse than planned, making dollars more expensive, which in turn costs the government more for fuel.

Other levies, announced by the minister of finance earlier this year, were due to come into effect on April 7.

They include an increase in fuel taxes of 25,5 cents a litre, which includes 7,5 cents towards a new fuel pipeline between Durban and Gauteng, and another eight cents for the Road Accident Fund, on top of the 64 cents it gets from every litre of fuel.

South Africans already have to find extra money for electricity prices increases. — Sapa

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