Fuel price nightmare: September brings steep increases
Government announced that the fuel prices are set to surge in September, with petrol up R1.34 and diesel increasing by more than R3 per litre.
The fuel price is about to deliver another blow to South African motorists, with steep increases confirmed for September.
The Department of Mineral and Petroleum Resources has announced the new prices, which take effect on Wednesday, 2 September.
Both grades of petrol will increase by R1.34 a litre. Diesel users face an even bigger shock.
Diesel 0.05% will rise by R2.94 a litre, while 0.005% diesel will increase by R3.15.
The increases are higher than the Central Energy Fund’s final projections. CEF had indicated petrol increases of up to R1.04 and diesel increases approaching R3.
For motorists, the relief provided by August’s petrol price cut has now disappeared.
WHY HAVE PRICES RISEN SO FAST?
The main driver is the international oil market. The average Brent crude price rose from $82.37 to $87.88 a barrel during the latest pricing period.
That increase pushed international petroleum product prices higher. Petrol’s contribution to the Basic Fuel Price increased by 127.79 cents a litre.
Diesel took an even harder hit. Its contribution rose by 321.29 cents a litre.
Global tensions have played a major role. Conflict involving the United States and Iran has disrupted expectations around oil supplies and shipping.
The Strait of Hormuz remains central to these concerns. Any disruption there can affect global oil and refined fuel markets.
South Africa imports crude oil and finished petroleum products. International prices therefore feed directly into the country’s monthly fuel calculations.
CAN THE RAND SOFTEN THE FUEL PRICE BLOW?
The rand has offered some relief, but not enough to prevent the increases.
The average exchange rate strengthened from R16.46 to R16.21 against the dollar during the latest review period.
That reduced the Basic Fuel Price contribution by 21.07 cents a litre for petrol. Diesel received a 29.06-cent benefit.
Another factor is the slate levy. The new structure includes a levy of 83.28 cents a litre for petrol and diesel.
The government also approved a 4.9-cent-a-litre increase in the petrol price structure. This accommodates a forecourt worker wage adjustment under the industry’s wage agreement.
The result is a substantial increase at the pumps.
WHAT WE WILL PAY AT THE PUMPS
From Wednesday, the inland price of 95 petrol will reach R26.92 a litre. Inland 93 petrol will cost R26.76.
Wholesale 0.05% diesel will reach R29.11 a litre. The 0.005% grade will cross the R30 mark at R30.05.
For households, commuters and businesses, the impact extends beyond the filling station.
Higher fuel costs can increase transport expenses and place pressure on the cost of moving goods.
After August’s brief petrol reprieve, September therefore brings a sharp reminder of how quickly global oil markets can reach South African wallets.