This December, South African travellers are facing a tough economic landscape as fuel prices are set to rise substantially.
The Department of Petroleum and Mineral Resources (DMRE) announced on Tuesday that both grades of petrol, 93 and 95, will see an increase of 17 cents per litre beginning Wednesday.
Diesel prices are facing even steeper hikes, rising by between 54.88 and 55.88 cents per litre, making the impact on consumers even more pronounced.
The new price adjustments revealed a concerning trend for fuel costs, with illuminating paraffin and LPGAS also experiencing increases.
The DMRE said that Diesel 0.05% (wholesale) would increase by 54.88 cents per litre, while diesel 0.005% (wholesale) would increase by 55.88 cents per litre.
Illuminating Paraffin will increase by 48.88 cents per litre, while LPGAS increases by 172.00 cents per kg. This means that 93 Petrol will increase from R20.98 to R21.15 per litre, while 95 Petrol will go up from R21.30 to R21.47 per litre.
Diesel 0.05% (wholesale) will increase from R18.66 to R19.21 and Diesel 0.005% (wholesale) will go up from R18.77 to R19.33 per litre. Illuminating Paraffin increases from R12.87 to R13.36 and LPGAS (per kg) goes up from R36.44 to R38.16 per kg.
Fuel prices in the country are largely determined by global oil prices and the local currency, which has been hard hit this past month.
In November, the global price of diesel increased and the rand came in weaker when compared to October, leading to an under-recovery in both petrol and diesel prices.
The average rand/US Dollar exchange rate between 1 November 2024 and 28 November 2024 was 17.9256 compared to the 17.5301 during the previous month.
The DMRE said that the Slate Levy on petrol and diesel will remain at 0.00 c/l with effect from December 4.
The prices of fuel differ between coastal and inland regions in the country.
Inland, the cost of 93 Petrol per litre will be R21.15, while 95 Petrol will cost R21.47 per litre.
Diesel 0.05% (wholesale) will be priced at R19.21, while Diesel 0.005% (wholesale) will cost R19.33.
Illuminating Paraffin will be R13.36 and LPGAS (per kg) will cost R38.16.
In the coastal regions, a litre of 93 Petrol will cost R20.36, while 95 Petrol will be priced at R20.68.
Diesel 0.05% (wholesale) will cost R18.42 per litre, while Diesel 0.005% (wholesale) will cost R18.57.
Illuminating Paraffin will be priced at R12.36, while LPGAS (per kg) will cost R35.20.
Ester Ochse, the product head at FNB Integrated Advice, told Business Report, “The biggest driver of this increase was the rand exchange rate and the currency weakened against the dollar as a result of the US political factors and election outcomes.”
“This is not good news for South Africa, because they traditionally drive to their holiday destinations over the festive season so we suggest that if you are travelling this festive season, you revise or budget for fuel upwards and then see where you can cut to cover the extra fuel expenses drive a bit more carefully to save some fuel.”
Koketso Mano, FNB senior economist, said that a weaker rand, the higher international diesel prices and higher supply margins.
Mano said, “We saw Brent crude prices remain range bound in November, but since March of this year we did see a softening trend in oil prices. As expected, the demand-supply fundamentals contained oil prices, and this was further supported by the recent easing in the Middle East tensions, so going into 2025 what’s going to drive prices is if, Chinese policy stimulus will support economic activity. We are also concerned that hostile trade tensions could be further exacerbated by Trump’s protectionist policies will weigh on overall growth.”
“When we think about the rand dollar exchange rate, we think that should there be continued volatility in the near term, this could be mitigated by high industrial and precious commodity prices that would be supportive of South Africa terms of trade, but the rand remains above our estimate of fair value but hopefully will improve as the global outlook becomes less uncertain and risk improves going into the latter part of next year,” Mano said.
Henry van der Merwe, the chairman of the South African Petroleum Retailers Association (Sapra), said, "This is only the second increase following an extended period of price stability. While not ideal, we are optimistic that the market will correct again soon, bringing relief to motorists as we move forward."
Van der Merwe added, "SAPRA is committed to supporting motorists and businesses during times of fluctuation and encourages careful budgeting as we approach the festive season. Fuel price adjustments reflect a complex interplay of global oil prices and currency factors, and we remain hopeful for a return to stability."
BUSINESS REPORT