The Department of Energy has announced the official fuel price adjustments that will come into effect on Wednesday, 6 January 2021.
All grades of fuel will see prices increases this month, with petrol climbing between 40 cents and 43 cents per litre, and diesel increasing by 54 and 55 cents per litre.
The official changes are as follows:
- Petrol 95: increase of 40 cents per litre;
- Petrol 93: increase of 43 cents per litre;
- Diesel 0.05%: increase of 55 cents per litre;
- Diesel 0.005%: increase of 54 cents per litre;
- Illuminating Paraffin: increase of 55 cents per litre.
The movement in prices is affected by two main factors – international petroleum costs, and the movement in the rand/dollar exchange rate.
The average international product prices for Petrol, Diesel and Illuminating Paraffin increased during the period under review, and the rand appreciated against the US dollar during the period under review, on average, when compared to the previous period.
The average rand/US dollar exchange rate for the period 27 November 2020 to 30 December 2020 was 14.9391 compared to 15.6305 during the previous period. This led to a lower contribution to the Basic Fuel Prices on petrol, diesel and illuminating paraffin by 24.19 c/l, 25.00 c/l and 24.30 c/l respectively.
However, this was completely undone by the movement in international oil prices, which contributed to higher international petroleum product costs of between 65 cents per litre and 80 cents per litre for petrol and diesel, respectively.
International oil prices have stabilised in recent weeks, but the Automobile Association said it is too early to tell whether this is a new plateau, or an expected pullback as trading activity declined over the Christmas period.
"The trend up to December 17 was quite markedly upward, and if that picks up more steam in the new year, it won’t bode well for fuel prices in 2021," it said.
"While South African fuel prices are well off their record highs, the country’s economy is in a fragile state, and any shocks to international oil prices or the Rand/US dollar exchange rate could hurt fuel users badly."
Another small change in the latest adjustments is the price difference between 93 and 95 petrol.