July fuel price will cost an extra R25 a tank, on average
Minister of Mineral and Petroleum Resources Gwede Mantashe announced that South African motorists face a fuel price increase set to take effect on Wednesday, 2 July. This adjustment reflects a combination of local and international factors influencing the cost of fuel.
While earlier reporting anticipated a decrease on the back of a stronger rand and soft oil prices, the monthly review process, which takes into account global crude oil and petroleum product prices, importation costs such as shipping and the rand/dollar exchange rate, revealed a different reality.
Your wallet is about to feel the squeeze:
Key factors behind this month's fuel price adjustment:
Crude oil prices: The average Brent Crude oil price rose from $63.95 to $69.36 per barrel during the review period. This increase was mainly due to geopolitical tensions in the Middle East, particularly between Israel and Iran, raising concerns over potential supply disruptions.
International petroleum product prices: Following crude oil trends, international prices for petrol, diesel and illuminating paraffin increased, contributing to higher basic fuel prices by 68.45 cents per litre for petrol, 100.48 cents per litre for diesel, and 83.20 cents per litre for paraffin. Propane and butane prices slightly decreased.
Rand limiting the damage: The rand strengthened against the dollar, moving from 18.11 to 17.84 rand per dollar, which helped reduce the fuel price contributions by more than 15 cents per litre for petrol and about 16 cents per litre for diesel and paraffin.
Slate levy: The slate balance was positive at R5.213-billion in May. Accordingly, the slate levy remains unchanged at zero cents.
Octane differentials: The price difference between 95 and 93 octane petrol grades is adjusted quarterly. This quarter, changes in the Basic Fuel Price differentials mean retail prices for these grades will differ by fuel-pricing zones.
Supply cost recovery for LPGas in Western Cape: A 14% increase in Supply Cost Recovery on LPGas imported through the Port of Saldanha Bay has been approved as an interim measure for 24 months. This raises the maximum retail price of LPGas in the Western Cape to R36.08/kg.
This rise in costs is already causing concern among everyday South Africans who rely on fuel for their livelihoods. Kagisho Sefako, who works in the transportation industry in the Western Cape and depends heavily on petrol, said the increase would hit his budget hard.
'We were still enjoying petrol decreases last month, and now this increase will really hit my budget for July. When petrol goes up, everything else follows,' he told Daily Maverick, worried about the impact on his daily expenses.
Echoing these concerns, Alberto de la Vega, a teacher in the Free State, expressed frustration. Already spending a significant amount on fuel, he said the increase would strain his pocket even further. DM
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