The department of mineral resources and energy said the new fuel prices would come into effect on Wednesday. (Waldo Swiegers/Bloomberg via Getty Images)
Mineral Resources and Energy Minister Gwede Mantashe announced on Monday that the prices of diesel and illuminating paraffin would decrease with effect from Wednesday.
A statement issued by the energy department said the retail price of 95-grade petrol would decrease by R2.04 to R25.42 a litre in Gauteng and to R24.77 in coastal areas. The wholesale price of diesel would ease by as much as 56 cents. Illuminating paraffin will now cost 82 cents less at wholesale.
The department said fuel prices would be lower this month partly due to the decrease in the average price of Brent crude oil, from US$105 to US$94 per barrel during the period under review. In addition, the rand had appreciated slightly against the US dollar from R16.87 to R16.70.
South Africa’s fuel prices are adjusted on a monthly basis, informed by international and local factors. Global factors include the fact that the country imports both crude oil and finished products at a price set at the international level, including importation costs, such as shipping.
“The demand for petrol is less than what it usually is during the driving season. Motorists are driving less due inflationary pressures, higher interest rates and persistent lockdowns in China. This has led to a decrease in the price of petrol during this period,” the energy department said.
John Loos, a property sector strategist at First National Bank, said the drop in the petrol price would ease cost pressures for commuters feeling the pinch from a depressed economy.
“Staff working in offices have been feeling the financial pain of commuting in recent months and this may have led to a greater number working more of the time from home than may have been the case in a scenario where petrol prices had remained low all along,” Loos said.
“Granted, petrol is still expensive, and as such still keeps transport costs high, but every price cut helps.”