The Department of Energy has published the fuel price changes for September 2019, with both petrol and diesel seeing a jump.
Petrol prices, for both grades, will increase by 11 cents per litre. Diesel, meanwhile, will go up by 26 cents per litre.
Illuminating paraffin will rise by 24 cents per litre.
The department cited a weak rand over the review period, which undermined the positive movement in international petroleum prices.
The average international product prices for petrol, diesel and illuminating paraffin decreased during the period under review, the department said, while the rand depreciated against the US dollar, on average, when compared to the previous period.
The average rand/US dollar exchange rate for the period 02 August 2019 to 29 August 2019 was R15.17 compared to R14.07 during the previous period. This led to a higher contribution to the basic fuel prices on petrol, diesel and illuminating paraffin by 51.01 c/l, 54.30 c/l and 54.72 c/l respectively
Despite a brief recovery last week, the rand was under constant pressure in August, with the country’s fundamentals remaining weak, while also being battered by international dynamics like the ongoing US-China trade war.
Local challenges remain with state-owned companies (most notably Eskom) in financial crisis, requiring state bailouts – while political scandals and interference remain in the headlines.
A recent economic plan laid out by finance minister Tito Mboweni – which was lauded by analysts and economists – is now facing political backlash from within the ANC and unions, while little is being done to curb government expenditure and resolve underlying issues at state companies.
Ratings firms have warned about the country’s growing debt-to-GDP ratio and slow economic growth, while the country waits for the Q2 GDP data to be released this week, with expectations that it will narrowly avoid a recession.
Internationally the rand was again beset by uncertainty around the global trade war, with US president Donald Trump pushing for higher tariffs and duties on Chinese-imported goods.
At the start of September, the trade war showed no signs of abating, with a flurry of new charges – by both China and the US – being announced and implemented over the weekend.
In the latest move, the Chinese government pushed to increased duties on a variety of major American goods exported to China, including soybeans and crude oil, by between 5% and 10%.
According to treasury partner at Peregrine Treasury Solutions, Bianca Botes, this will continue to add some pressure on the currency. International oil prices are also likely to be affected.
However, the real pain in the trade war still lies ahead, with the bulk of increased tariffs on both Chinese and US goods coming into effect in December 2019.
Here is how the fuel price changes will reflect for September:
|Fuel (Inland)||August Official||September Official|
|0.05% Diesel (wholesale)||R14.33||R14.59|