Why South Africa adjusts fuel price monthly-Minister
London, June 7, 2019 (AltAfrica)-South Africa’s Minister of Minerals and Energy Resources, Mr Gwede Mantashe, says the monthly adjustment of fuel prices is based on current local and international factors for efficient pricing regime
For the month of June, it’s been confirmed that the petrol price will indeed increase at midnight of June 5 – a fact which doesn’t bode well for motorists and general consumers already feeling the economic pinch
The Department of Energy announced on Tuesday that South Africa would suffer its fifth consecutive fuel hike. According to data released by the Central Energy Fund (CEF), this is what these hikes will look like

- Petrol: Increase of 9 cents per litre
- Diesel: Increase of 13 cents per litre
- Paraffin: Increase of 8 cents per litre
South Africa’s fuel prices are adjusted on a monthly basis, informed by international and local factors. International factors include the fact that South Africa imports both crude oil and finished products at a price set at the international level, including importation costs
Current major factor for the latest adjustment is the newly implemented Carbon Tax Levy which was announced by the Minister of Finance on 20 February 2019. The Tax is effective from 1 June 2019, and in line with that announcement, the Fuel Levy applicable to Petrol and Diesel will increase by 9.0c/l and 10.0c/l respectively with effect from the 5 June 2019. Details of the carbon tax levy can be found in the media statement that was released by the National Treasury on the 27 May 2019.
In addition to the new Carbon Tax, another local factor is the implementation of the Self-Adjusting Slate Levy Mechanism Rules. Effective from 5 May 2019, the Slate Levy on Petrol and Diesel will be 13.16 cents per litre. At the end of April 2019, the combined cumulative Slate Balance on Petrol and Diesel amounted to minus R1.41billion.
On the international front the main reasons for the increase are the Rand / Dollar exchange rate and the Brent Crude Oil Price. During the period under review, the Rand depreciated against the US Dollar from R14.14 to R41.41. This led to a higher contribution to the Basic Fuel Price on Petrol by 14.32cents per litre, Diesel by 15.01cents per litre, and Illuminating Paraffin by 14.92cents per litre.
The Brent Crude Oil Price on the other hand experienced a slight upward increase from 71.00 US Dollars (USD) per barrel to 71.60 USD per barrel. The pressure on oil prices has been caused by the recent escalating tensions between the United States of America and China.
Going forward the expectation is that barring any negative geopolitical event, the indications are that there will be a reprieve in Fuel Prices for the month of July.
Based on current local and international factors, the fuel prices for June 2019 will be adjusted as follows:
Petrol (93 and 95 Octane, ULP and LRP): 9.00 c/l increase;
Diesel (0.05% sulphur): 33.16 c/l increase;
Diesel (0.005% sulphur): 33.16 c/l increase;
Illuminating Paraffin (wholesale): 8.00 c/l increase;
SMNRP for IP: 10.00 c/l increase;
Maximum LPGas Retail Price: 7.00 c/kg increase.
The fuel prices schedule for the different zones was published on Tuesday, 4 June 2019.
While the recent barrages of petrol price increases are not as dire as those experienced earlier this year and towards the end of 2018, the meagre hikes come at a terrible time for South Africans.
Earlier on Tuesday, Stats SA announced that the country’s GDP had shrunk by 3.2% in the first quarter of 2019 – a dismal decline last experienced more than a decade ago. This, in turn, has weakened the rand’s defence, which will undoubtedly result in further economic instability – particularly pertaining to the cost of crude oil.
Increases in the price of diesel are especially daunting for the economy – particularly in light of the recent GDP report which noted an epic nosedive in the Agriculture secto
Issued by: Department of Energy
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