Lerato Mbhiza
South Africa motorists will be hit with significant petrol and diesel price hikes after international oil prices rose in January.
The Department of Minerals and Energy announced on Tuesday that the price of all grades of petrol will increase by 75c/l , while diesel will rise by 70 and 73c/l.
Unleaded petrol of both grades (93 and 95) will rise by 75c a litre, bringing the Gauteng price of 95 unleaded petrol to R23.24 a litre, while the coastal price will reach R22.52.
The wholesale price of diesel will increase by between 70c and 73c on Wednesday, leaving the Gauteng diesel price at R21.36 a litre, with the coastal price rising to R20.64.
The wholesale price of illuminating paraffin will be hiked by 53c a litre and the maximum retail price for LP gas is going up by 37c per kg.
South African fuel prices are largely determined by international oil costs and the rand exchange rate, as oil is priced in dollars.
The average Brent Crude oil price increased from $77.35 a barrel to $82.03 over the past month.
The Department of Mineral Resources and Energy noted that this was due in part to attacks on Red Sea oil cargoes, which caused shipping companies to reroute cargoes around the Cape of Good Hope. This increased shipping rates as the route is much longer. In addition, cold weather hit oil production in the US.
The rand also weakened from around R18.66/$ to R18.77 over the past month, amid concerns that US interest rates may not be cut as early as expected.
At the start of January, petrol was cut by 62 cents per litre to R22.49 the lowest price since July 2023. Diesel was lowered by between R1.18 and R1.26 to R20.63, also the best level since July.
The adjusted prices will kick in on Wednesday.
A spokesperson for the department, Robert Maake, said higher oil prices and lower production in the United States (US) are mostly to blame.
“The rand weakened against the dollar during the same period. In line with the provision of the self-adjusting slate levy mechanism rules, the slate levy on petrol and diesel will remain at 0c per litre with effect from the 7th February 2024”.
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