The Department of Energy has published the latest fuel price adjustments for December, showing another massive increase in the price of petrol and diesel in South Africa this week.
According to the department, the following price changes will take effect on Wednesday, 1 December:
- Petrol 95: increase of 81 cents per litre;
- Petrol 93: increase of 81 cents per litre;
- Diesel 0.05%: increase of 73 cents per litre;
- Diesel 0.005%: increase of 75 cents per litre;
- Illuminating Paraffin: increase of 42 cents per litre.
The hike in prices are due to a weaker rand and higher oil prices during the period under review.
The rand depreciated, on average, against the US dollar (from R14.72 to R15.85) during the period under review. This led to higher contributions to the Basic Fuel Prices of petrol, diesel and illuminating paraffin by over 34 cents per litre.
The average Brent Crude oil price increased from $82.50 to $83.00 per barrel during the period under review.
The key driver is the higher global demand recovery amid a weaker supply response from non-OPEC and other oil producers. There is a mismatch between demand and supply, i.e., there is more demand for oil products than the market can supply.
The US and other major oil consumers are coordinating efforts to try to lower high prices by releasing oil from their inventory stocks, while OPEC and Non-OPEC members are refusing to increase oil production to match the global recovery demand.
“It is important to appreciate that fuel prices are soaring worldwide due to persistently high crude oil prices. Record pump prices have been experienced in many other countries,” the department said.
The department said it is aware of the inflationary nature of the high global fuel prices and the impact on the transport costs for commuters. It said it is also making margin adjustments on fuel prices and adjusting the slate levy, adding to the fuel price hikes.
In line with the application of the Regulatory Accounting System (RAS) the minister of Energy approved a net increase of 17.84 c/l in the annual margin adjustments on petrol and a net increase of 8.20 cents per litre on diesel and illuminating paraffin wholesale prices, with effect from the 1 December 2021.
An increase of 26.30 c/l (i.e. from 15.36 c/l to 41.66 c/l) will be implemented into the prices structures of petrol and diesel in line with the Self-Adjusting Slate Mechanism rules.
The Department of Mineral Resources and Energy said earlier in November that it will no longer publish the daily over or under-recovery data for fuel prices in South Africa.
This information was previously used by companies and media houses to gauge the monthly estimates for petrol price increases or decreases. In recent months, the department has stopped these daily updates in favour of a bi-monthly update – once at mid-month and again at the end of the month.
The Central Energy Fund (CEF) will only update the information publically once, at the end of the month.
The Automobile Association criticised the move, saying that keeping the information hidden is ultimately not in the best interest of motorists and consumers who are now unable to accurately prepare for fuel price changes.
This is how the prices will reflect at the pumps.
|Fuel (Inland)||November official||December official|
|0.05% diesel (wholesale)||R17.20||R17.93|
|0.005% diesel (wholesale)||R17.23||R17.98|