South Africa’s fuel prices are adjusted monthly, and starting from October 7th, the prices of gasoline and diesel will see a significant increase.
According to data released by the Central Energy Fund (CEF) and the Department of Mineral Resources and Petroleum Resources (DMPR), the retail price of 95 unleaded gasoline in South Africa will be raised by 3.33 rand (0.20 USD) per liter, while the wholesale price of 0.005% sulfur diesel will increase by 3.24 rand per liter; in inland areas such as the Gauteng province, the retail price of 95 unleaded gasoline is expected to exceed 30 rand per liter.
The DMPR stated that the CEF calculates the basic fuel prices on a daily basis on behalf of the department, which serves as the basis for monthly adjustments. Due to South Africa’s reliance on imported crude oil and oil products, the retail prices are influenced by international oil prices and the rand-to-dollar exchange rate. Therefore, factors such as surging international oil prices and fluctuations in the rand exchange rate will drive up South Africa’s import fuel costs, which will then be reflected in the monthly adjustment data.
Media outlets like “The Witness” cited CEF end-of-month data estimates, predicting a 3.29 rand increase per liter for 95 unleaded gasoline. However, the subsequent adjustments announced by DMPR and CEF set the increase at 3.33 rand. If the extent of the increase aligns with the initial estimates, starting from October 7th, the retail price of 95 unleaded gasoline in coastal areas may rise to approximately 29.23 rand, while inland areas could see prices around 30.10 rand per liter; 93 unleaded gasoline in inland retail prices may rise to about 29.94 rand per liter.
The increase in prices is primarily driven by the surge in international oil prices and the rand exchange rate. The tension in the Middle East raises concerns in the market about potential disruptions in crude oil production and transportation, leading to expectations of increased oil price volatility, including potential supply risks in the Hormuz Strait.
South Africa had only recently increased fuel prices on September 2nd, with both 95 and 93 unleaded gasoline prices rising by 1.34 rand per liter, while the prices of both diesel variants increased by 2.93 rand and 3.14 rand respectively.
(This article is based on a report by Reuters)