By Lebone Rodah Mosima
Minister of Mineral and Petroleum Resources Gwede Mantashe said fuel prices will decrease from July 1, driven by lower international oil prices and a stronger rand, despite the reinstatement of the full fuel levy.
The Department of Mineral and Petroleum Resources said on Tuesday that South Africa adjusts fuel prices monthly based on international and domestic factors, including crude oil prices, international petroleum product prices, the rand/U.S. dollar exchange rate, the slate levy, fuel levy measures, octane differentials and the maximum refinery gate price for liquefied petroleum gas (LPG).
The department said the average Brent crude oil price fell to $86.53 per barrel during the review period from $104.59, citing improved global supply expectations following the signing of a memorandum of understanding between the United States and Iran.
Average international petroleum product prices also declined in line with crude oil prices, reducing the Basic Fuel Price (BFP) contribution by 295.97 cents per litre for petrol, 498.47 cents for diesel and 510.51 cents for illuminating paraffin.
“The prices of propane and butane increased during the period,” the department said.
The rand also strengthened against the U.S. dollar, averaging 16.38 rand per dollar, compared with 16.52 in the previous review period. The appreciation reduced the BFP contribution by 11.27 cents per litre for petrol, 13.75 cents for diesel and 13.37 cents for illuminating paraffin, it said.
The cumulative slate account, which compensates fuel companies for differences between actual and regulated fuel prices, recorded a negative balance of 13.32 billion rand for petrol and diesel at the end of May.
“In line with the provisions of the Self-Adjusting Slate Levy Mechanism, the slate levy of 113.94 cents per litre will be implemented in the price structures of petrol and diesel from July 1,” the department said.
The slate levy has been reduced by 43.8 cents per litre, from 157.74 cents.
The department also confirmed that the temporary fuel levy relief announced by the finance minister has been phased out from July 1, with the full fuel levies of 429.00 cents per litre on petrol and 416.00 cents per litre on diesel reinstated.
It said the quarterly adjustment to the Basic Fuel Price differential between 95- and 93-octane petrol would take effect from July 1, resulting in different retail prices across fuel-pricing zones.
The maximum refinery gate price for LPG imported through the Port of Saldanha Bay will increase to 18,370.34 rand per metric tonne, while the maximum retail price will be 40.84 rand per kilogram, effective July 1.
The official July fuel price adjustments are:
- Petrol 93 (ULP & LRP): down 201.00 cents per litre
- Petrol 95 (ULP & LRP): down 196.00 cents per litre
- Diesel (0.05% sulphur): down 313.80 cents per litre
- Diesel (0.005% sulphur): down 358.80 cents per litre
- Illuminating paraffin (wholesale): down 523.00 cents per litre
- SMNRP for illuminating paraffin: down 697.00 cents per litre
- LPG maximum retail price: up by between 16.00 and 19.00 cents per kilogram in the Western Cape.
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