/ 4 September 2023

Mantashe confirms fuel prices will increase sharply on Wednesday

A further increase in the petrol price of 30 cents per litre is expected in February due to the weak exchange rate.
Motorists can expect an increase at the petrol pumps from next Wednesday

Mineral resources and energy minister Gwede Mantashe announced on Monday that the prices of petrol, diesel and illuminating paraffin would increase with effect from Wednesday, 6 September.

A statement issued by the department said the retail price of 95-grade petrol would rise by  R1.71 a litre to R24.54 a litre in Gauteng, while the wholesale price of diesel would jump by between R2.76 and R2.84 a litre. The cost of illuminating paraffin will go up by R2.78 a litre.

South African fuel prices are largely affected by international oil costs and the rand exchange rate, as oil is priced in dollars.

“The rand depreciated against the US dollar during the period under review, on average, when compared to the previous period. The average rand/US dollar exchange rate for the period 28 July 2023 to 31 August 2023 was R18.67 compared to R18.28 during the previous period,” the department of mineral resources and energy said.

South Africa’s fuel prices are adjusted on a monthly basis, informed by factors such as importation costs, including shipping.

Because of the tightening supply from production cuts in Saudi Arabia, the price of Brent Crude oil price increased from $79.75 to $84.78 during the period under review.

The department said diesel and paraffin prices increased because of lower shipments of Russia’s Urals crude oil, as well as rising demand ahead of the winter season in the Northern Hemisphere. 

Last week, the Automobile Association expressed concern about the effect of rising diesel prices.

“South Africans remain financially constrained, and the outlook is bleak for many millions of people,” it said in a statement.

“While there are many economic challenges to overcome, the association believes dealing effectively with the fuel price, and introducing sustainable measures to mitigate rising fuel costs, is a vital part of beginning to address those challenges.”