The Department of Energy delivers unwelcome news to South African motorists as fuel prices reach a historic high. With the latest fuel adjustments, both grades of petrol (93 and 95) are set to increase by a staggering R1.71 per litre, taking effect on Wednesday, September 6th.
This sharp rise means that a litre of 95 unleaded petrol will now cost R24.54 inland, while the price for a litre of 93 will be R24.14. Along the coastal areas, the costs are slightly lower, with a litre of 95 unleaded priced at R23.82 and a litre of 93 at R23.42.
In addition to petrol, illuminating paraffin prices will also see a substantial increase, rising by R2.78 per litre. The wholesale price of diesel will follow suit with a hike of R2.84 per litre.
The Automobile Association has labeled this fuel price hike as a record-breaking increase. It’s essential to understand that South African fuel prices are heavily influenced by international factors, primarily international oil prices and the exchange rate of the rand against the dollar, as oil is globally priced in dollars.
Various Factors Contributing To Fuel Prices Hike
In a statement, the Department of Mineral Resources and Energy attributed the rise in fuel prices to various factors. The average Brent crude oil price surged from $79.75 to $84.78 per barrel in the past month, primarily due to production cuts by Saudi Arabia. This contributed significantly to the elevated petrol prices.
Furthermore, the department explained that the high petrol prices are also a result of low inventories and refinery outages, impacting the production of blending components used in the creation of summer-grade petrol. These disruptions increased the cost of production.
The surge in diesel and paraffin prices is attributed to lower shipments of Russia’s Urals crude oil, which is rich in middle distillates. Additionally, there is a rising demand for middle distillates ahead of the winter season in the Northern Hemisphere, further driving up prices.
It’s worth noting that the average rand-dollar exchange rate declined from R18.28 to R18.67 over the past month, contributing to the overall increase in fuel costs for South African motorists.
As motorists grapple with these record-high fuel prices, it becomes clear that both international and domestic factors are playing a significant role in the financial burden placed on those reliant on personal vehicles and transportation services in South Africa.