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Good news: Petrol and diesel to decrease from Wednesday, 7 June 2023
Growth in oil inventories and concerns about the US economy were among the reasons for the fuel price decrease.
Photo: Neil McCartney
The Department of Mineral Resources and Energy (DMRE) has announced that both 93 and 95 octane petrol will decrease by 71 cents per litre from Wednesday, 7 June 2023.
The price of diesel (0.05% sulphur) decreases by 84c per litre while diesel with 0.005% sulphur decreases by 80c per litre.
Meanwhile, illuminating paraffin will cost 43c per litre less, while the price of LP gas increases by 0.75c per kilogramme.
Reason for petrol decrease
DMRE spokesperson Robert Maake said there were several international and local factors that contributed to the adjustments in the petrol and diesel prices.
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Brent Crude price
Maake said the main reasons for the fuel price adjustments was the average Brent Crude oil price decreased from $82.20 to $75.90 during the period under review.
The release of the Chinese Purchasing Managers Index (PMI) data, which has decreased indicating lower economic growth, also played a role.
Maake said demand for crude oil imports to China is increasing, although at a slower pace.
“However, this was not enough to turn the decreasing trend around,” he said.
Unexpected increases in the oil inventories, production cuts announced in April, affected demand. The collapse of another US bank – First Republic Bank – and concerns about the US debt ceiling also played a role in the oil price.
Rand to US Dollar
The department said the rand depreciated on average, against the US Dollar (from 18.13 to 18.99 Rand per USD) during the period under review when compared to the previous one.
“This led to higher contributions to the Basic Fuel Prices of petrol, diesel and illuminating paraffin by 54.58 c/l, 50.88 c/l and 52.52 c/l, respectively.”
Slate levy
The department said the cumulative slate balance on petrol and diesel as at the end of April had a positive balance of R1 265 million.
“Therefore, there is no slate levy applicable in the petrol and diesel price structure for June 2023.”
Carbon levy
The department said an additional 1.0 c/l levy in petrol and diesel, which had been implemented with effect from the 3 May 2023 to recoup levy payments for April 2023, has been removed.
“With effect from the 7th of June 2023, the Fuel Levy will decrease to 395.0 c/l and 381.0 c/l respectively in the petrol and diesel price structures respectively,” it said.
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