The Minister of Mineral Resources and Energy approved a 5.0 c/l increase in the price structures of petrol to accommodate the wage increase for Forecourt employees in line with the Motor Industry Bargaining Council (MIBCO) Agreement. This increase will be implemented from the 6th of September 2023
Both grades of petrol (93 and 95) will increase by R1.71 on 6 September.
This means 93 unleaded will cost R24,14 per litre inland, and 95 unleaded will cost R24,54.
On the coast, 93 unleaded will cost R23,42 per litre and 95 unleaded will cost R23,82
This is the highest increase since July 2022.
The wholesale price of diesel with a high sulphur (0.05%) content will increase by R2.84 per litre while diesel with low sulphur (0.005%) will increase by R2.76 per litre.
Illuminating paraffin goes up by R3.70 per litre.
The large fuel price hikes are largely due to the increase in the price of Brent crude oil and the weakening rand/dollar exchange rate.
This month’s hike also accommodates a five-cent wage increase for pump attendants, administrative staff and cashiers at service stations.
A lower supply from Russia combined with northern hemisphere countries stockpiling ahead of winter has led to the steep diesel price increase.
Saudi Arabia has also cut down on their supply of Brent crude oil into the market.
One of the primary drivers behind the rising petrol prices in South Africa is the global oil market’s volatility. South Africa heavily relies on oil imports to meet its energy demands, making it susceptible to international oil price fluctuations. When global oil prices rise due to geopolitical tensions, supply disruptions, or other factors, it invariably affects the price of petrol at local pumps. South African motorists often find themselves paying more due to these external factors.
Another significant factor contributing to the increase in petrol prices is the weakening South African Rand. The exchange rate plays a crucial role in determining petrol prices because oil is traded in US dollars. A weaker Rand means that it takes more local currency to purchase the same quantity of oil, leading to higher petrol prices. Economic instability and fluctuations in the currency exchange rate can exacerbate this problem.
Government taxes and levies are also key drivers of petrol price hikes in South Africa. A substantial portion of the petrol price is composed of taxes and levies imposed by the government. When the government raises these taxes or fails to adjust them in line with changing economic conditions, it directly impacts the price consumers pay at the pump.
Additionally, South Africa’s domestic factors, such as refinery capacity and distribution costs, influence petrol prices. Infrastructure constraints and inefficiencies can add to the overall cost of producing and delivering petrol, which, in turn, affects retail prices. Addressing these domestic issues is essential in mitigating the impact of rising petrol prices.
In conclusion, the price of petrol in South Africa is indeed subject to upward pressure due to a combination of global oil market volatility, a weaker currency, government taxes, and domestic factors. To alleviate the burden on motorists, it is crucial for the government to adopt policies that promote stability in these areas while also exploring alternative energy sources to reduce dependency on fossil fuels. Until then, South African motorists may need to brace themselves for continued fluctuations in petrol prices.