South African fuel prices set to rise on 4th January

Fuel DispenserSouth African fuel prices are to rise on 4 January 2017. (Image source: Santeri Viinamaki/Commons)The South African Department of Energy announced on 29 December that as of 4 January, the retail price of 93 octane shall rise by 50 cents per litre and 95 octane by 48 cents a litre

As per the South African monthly fuel price adjustment, the Department of Energy released a statement on 29 December stating that Petrol (93 ULP and LRP) will increase by 50 cents per litre and Petrol (95 ULP and LRP) will increase by 48 cents per litre. 

In addition, Diesel (0.05 per cent sulphur) will increase by 39 cents per litre, Diesel (0.005 per cent sulphur) will increase by 37 cents per litre, wholesale price of illuminating paraffin will increase by 43 cents per litre, SMNRP of illuminating paraffin will increase by 58 cents per litre and the maximum retail price of LPG will increase by 106 cents per kilogram. 

The Department of Energy has set out a number of reasons why this increase is taking place. First is the contribution of the Rand/US dollar exchange rate. The Rand has strengthened against the dollar from R13.91 to R13.87. 

The second reason is the increase of crude oil price. This is prodominately because of the OPEC cut of production by 1.2 mn barrels per day from 1 January 2017. In addition, Russia and other non-OPEC countries agreed to cut production by 600,000 barrels per day. The Department of Energy also list that the price rise is directly in line with the crude oil price. 

In the official media statement, the department states that "In line with the Working Rules to determine the Basic Fuels Prices, the 95 octane (unleaded) grade is the price-marker grade and the BFP-differentials between 95 and 93 Octanes will be adjusted on the first Wednesday of each quarter. The 95/93 octane price differential will be adjusted with effect from 04 January 2017."

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