Minister of the Department of Mineral Resources and Energy (DMRE), Gwede Mantashe, made a sobering announcement that South African motorists should expect a petrol price increase from Wednesday, 6 September. Fuel prices are adjusted monthly according to prevailing local and international factors.
The petrol price increase will amount to R1.71 per litre for both 93 and 95 unleaded. A litre of 95 unleaded will cost Gauteng residents R24.54; the highest unit price paid since August 2022.
Diesel will be raised by between an eye-watering R2.76 and R2.84 per litre, taking the Gauteng price up to between R22.58 and R23.05 a litre, which are new levels for 2023.
Illuminating paraffin will go up by a shocking R2.78 per litre.
The Main Reasons for the Petrol Price Increase
International factors cause a petrol price increase because South Africa imports crude oil and several finished products. The prices for these products are set at a global level and include importing costs such as shipping costs. The main contributors to the petrol price increase are:
- Brent Crude Oil Prices
The world supply of Brent Crude Oil was lower because Saudi Arabia decided to cut their production levels. Less available supply means each barrel of oil becomes more expensive to buy.
- Low Inventories
Low inventories of oil, refinery outages, and lower shipments of Russia’s Urals crude oil made the production process more expensive.
- An Expensive Dollar
Businesses and other importers need more Rands to buy Dollars (the Rand price of Dollars went up from R18.28 to R18.67). Therefore, it is more expensive for South Africa to buy oil and oil-related products.
- Increase in Wages for Forecourt Staff
A statement by the ministry explained:
“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 is going to be a challenging time for South Africans. Economists have warned that this petrol price increase will not be the last one for the year.
40,000 Driver’s Licenses to Unemployed Youth.