Fuel price adjustment at midnight good news to motorists

The minister of mineral resources and energy, Gwede Mantashe, announced the adjustment of fuel prices based on current local and international factors with effect from midnight on Wednesday June 5.

According to a statement by the department, South Africa’s fuel prices are adjusted monthly, 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, shipping costs, etc.” the statement reads.

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The main reasons for the fuel price adjustments are due to:

• Crude oil prices
The average Brent crude oil price decreased from US$88.10 to US$82.98 per barrel during the period under review. The main contributing factors are the increased production by the US and other non-OPEC countries on the back of a slow or declining global economy.

• International petroleum product prices
The average international product prices decreased following the lower Brent crude oil prices during the period under review. Furthermore, petrol prices were also affected by the release of inventories by the US ahead of the Memorial Day holiday. The movement in product prices has led to a lower contribution to the basic fuel price of petrol by 76.16c/L, diesel by 60c to 71c/L and illuminating paraffin by 50.20c/L.

• Rand/US dollar exchange rate
The rand appreciated, on average, against the US dollar (from R18.90 to R18.45 per USD) during the period under review when compared to the previous one. This led to lower contributions to the basic fuel prices of all products by about 30c/L on all products.

• Implementation of the slate levy
The cumulative slate amounted to a negative balance for petrol and diesel of R696.3m at the end of April. In line with the provisions of the self-adjusting slate levy mechanism, a slate levy of 4.38c/L will be applicable in the price structures of petrol and diesel with effect from June 5, which is a decrease of 17.54c/L on the prices of both diesel and petrol.

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The statement said based on current local and international factors, the fuel prices will be adjusted as follows:
• Both grades of petrol 93 and 95 (ULP & LRP): R1.24/L decrease.
• Diesel (0.05% sulphur): R1.19/L decrease
• Diesel (0.005% sulphur): R1.08/L) decrease
• Illuminating paraffin (wholesale): 80c/L decrease
• SMNRP for IP: R1.07/L decrease
• Maximum LP gas retail price: R1.35/kg) decrease.

The fuel prices schedule for the different zones will be published later today, Tuesday June 4.