Global events have led to the substantial 71 cents a litre increase in the price of petrol, the Energy Department said today.
This comes as the department announced that a litre of 95 ULP will rise by 71 cents in Gauteng and 66 cents at the coast, while that of diesel (0.05% sulphur) will rise by 47.6 cents at the coast and 51.9 cents in Gauteng.
In Gauteng, a litre of petrol will now cost R11.66.
The price of illuminating paraffin (wholesale) is set to increase by 20.6 cents at the coast, while it will rise by 26.6 cents in Gauteng.
“This is a tough period for motorists. We recognise the challenges that motorists are going through,” the department’s Deputy Director General for Hydro-carbons and Energy Planning, Tseliso Maqube, told media.
He said the department acknowledged the trend of increasing petrol prices and this month’s “sizeable” hike.
The department advised motorists to be economic in terms of their fuel use, given the increasing prices.
Maqubela said South Africa was a price taker in terms of fuel supplies, adding that global prices have been on the increase (including Brent crude) since December last year.
Maqubela noted that the global economy in the main has been on the mend and as a result, there will be an increase in demand that will have an impact on the price.
Geopolitical issues in countries producing oil also have had an impact on pricing. In the US, the closing down of refineries in the East Coast – leading to the US obtaining its supplies from the Mediterranean – has meant that there was an increase in demand. Fifty percent of South Africa’s fuel price is based on prices it gets from the Mediterranean.
“If the demand there increases, the prices increase as well, hence we have seen gradually a [systematic] increase in the petrol price. In the main, that global set of events has led to the situation we are in today,” explained the Maqubela.
The fuel tax levy announced by Finance Minister Pravin Gordhan as well as the RAF levy and pipeline tariffs announced by NERSA factor into the price of petrol.
Maqubela said there was consensus that there was a premium on crude oil prices due to developments in the Middle East.
“I must indicate that in the structure of prices in South Africa, no direct impact has been factored in as a result of sanctions. What you see is the impact of crude oil imports,” he added.
Following recent shutdowns of refineries in South Africa, there was now stable supply available for motorists.
The department has issued several tips, including the checking of tyre pressure, not speeding as well as car-pooling as methods of saving fuel.
The prices come into effect on the fourth of April.
Kevin Hustler, CEO of the Nelson Mandela Bay Business Chamber said; “The reported rise in petrol price is very bad news for business, already very hard hit and struggling to cope with sharply rising input costs. It is bad news for consumers too, whose budgets are squeezed tighter every passing day.
“An increase in petrol price affects logistics, as transport costs are directly affected. As input costs rise, so prices rise, hitting the pockets of consumers, and reducing the competitiveness of local business.
“A price hike such as this impacts the competitiveness of local industry in the international market and increases the threat of business failures and job losses, which the city can ill afford.”