The price of petrol (95 ULP and LRP) will fall by 17 cents per litre tomorrow, while the price of diesel (0.005% sulphur) will increase by 18 cents per litre, a statement from Department of Mineral Resources and Energy said yesterday.
South Africa’s monthly fuel price changes are informed by international and local factors.
Including the rand exchange rate and that South Africa imports both crude oil and finished products at a price set at the international level, including importation costs, e.g. shipping costs.
FNB Senior economist Koketso Mano said they expect continued slight upward pressure on oil prices in the months ahead due to their belief the rand would remain under pressure in the short term, the possibility of further oil production cuts by major oil producers as global growth slows, and the fact that the World Bank had most recently strengthened its forecast for global economic growth this year, even though the growth was nonetheless expected to be slow.
The Department of Mineral Resources and Energy said the main reasons for the fuel price adjustments were a slight decrease in the average Brent crude oil price from $75.90 to$ 75.10 per barrel during the period under review.
The decline was due to recession fears and further global economic slowdown, which saw the US Federal Reserve leaving interest rates unchanged last month, but warning of future increases. The European Central Bank and The Bank of England increased interest rates due to the continued recession fears.
Also contributing was a decision by OPEC and non-OPEC members’ not to increase oil production cuts during their last meeting.
International petrol prices rose due to the driving season in the Northern Hemisphere. Middle distillate prices rose at a higher rate than petrol due to tighter supplies.
LPG prices fell due to the decline in the prices of propane and butane.
The rand, on average, appreciated against the US dollar from 18.99 to 18.64 rand per dollar during the period. This led to lower contributions to the Basic Fuel Prices of petrol, diesel and illuminating paraffin, the Department said
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