Citizen Reporter
Reporter
2 minute read
4 Jan 2021
11:17 am

Petrol price increase confirmed from Wednesday

Citizen Reporter

The Automobile Association says it is concerned over the nearly 13% increase in international petroleum prices. 

Picture: Moneyweb

Minister of Mineral Resources and Energy Gwede Mantashe has announced the adjustment of fuel prices based on current local and international factors with effect from Wednesday, 6 January.

Based on current local and international factors, the fuel prices for January 2021 have been adjusted as follows:

  • Petrol price (both 93 and 95 ULP and LRP) will increase by 43 cents per litre;
  • Diesel (both 0.05% and 0.005% sulphur) will increase by 55 cents per litre; and
  • Illuminating paraffin (wholesale) will increase by 55 cents per litre.

South Africa’s fuel prices are adjusted on a monthly basis, informed by international and local factors, said Mantashe.

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.

The main reasons for the fuel price adjustments are due to the contribution of the rand/US dollar exchange rate, which led to lower contributions to the basic fuel prices of petrol, diesel and illuminating paraffin by about 24.00 ct.

Crude oil prices increased by almost 20% from $42.10 per barrel during the period under review.

The Automobile Association (AA) said was concerned over the nearly 13% increase in international petroleum prices. 

Despite oil prices having stabilised over the past few days, the AA said it was too early to tell whether this was a new plateau, or “an expected pullback as trading activity declined over the Christmas weekend”. 

“The trend up to 17 December was quite markedly upward, and if that picks up more steam in the new year, it won’t bode well for fuel prices in 2021.

“While South African fuel prices are well off their record highs, the country’s economy is in a fragile state, and any shocks to international oil prices or the rand/US dollar exchange rate could hurt fuel users badly,” the AA said.

Compiled by Vhahangwele Nemakonde and Nica Richards.

For more news your way, download The Citizen’s app for iOS and Android.