South African motorists are bracing themselves for a considerable increase in petrol and diesel prices starting Wednesday, March 6.
The Department of Mineral Resources Energy (DMRE) has confirmed that both grades of petrol will witness a hike of R1.21 per litre, while diesel is slated to increase by between R1.06 (500ppm) and R1.19 (50ppm).
Following the price adjustments, a litre of 95 Unleaded will cost R23.73 at the coast and R24.45 inland, with 93 Unleaded rising to R24.13. Meanwhile, the wholesale price of 50ppm diesel will surge to R21.91 at the coast and R22.62 inland, with unregulated retail prices expected to be at least R2 higher.
Calculating the Impact:
For the average motorist, the cost of filling up a small hatchback with 30 litres of petrol will surge by approximately R36 from Wednesday. Similarly, a 50-litre refuel for a medium car or SUV will see an additional expense of R60.50.
For those driving larger vehicles like bakkies or SUVs, filling a 70-litre diesel tank will incur costs ranging between R74 and R83.
Understanding the Price Dynamics:
The surge in fuel prices this month is primarily attributed to the escalation in international oil prices, adding roughly R1 to the over-recovery observed in February. This increase in product prices is reportedly a consequence of conflict in the Middle East and production cuts by OPEC.
Unfortunately for consumers, relief seems distant, as experts predict tighter supplies throughout 2024. Dennis Kissler, a senior trader at BOK Financial, informed Reuters that OPEC is currently aiming to drive Brent Crude oil prices to approximately $85 per barrel, with prices hovering between $82 and $84 for much of February.
Local fuel prices continue to bear the burden of high taxes, with the General Fuel Levy and Road Accident Fund levy collectively adding R6.13 to each litre of fuel in South Africa. Fortunately, this year’s Budget Speech did not introduce any further increases to these levies.
