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Tuesday, 02 March 2021 15:48

Higher oil prices to drive hikes in fuel from Wednesday.

Staff Reporter.

The Department of Energy has published the official fuel price adjustments for March, showing a big hike for both petrol and diesel.

The following changes will take effect from Wednesday, 3 March 2021:

  • Petrol 95: increase of 65 cents per litre;
  • Petrol 93: increase of 65 cents per litre;
  • Diesel 0.05%: increase of 54 cents per litre;
  • Diesel 0.005%: increase of 56 cents per litre;
  • Illuminating Paraffin: increase of 47 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.

The rand, meanwhile, 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 29 January 2021 to 25 February 2021 was 14.7631 compared to 15.0872 during the previous period. This led to a lower contribution to the Basic Fuel Prices on petrol, diesel and illuminating paraffin by 14.34 c/l, 14.18 c/l and 13.72 c/l respectively.

Despite the rand emerging stronger over the last month, the exchange rate benefit was not enough to counter rising oil prices.

The Automobile Association has warned that global oil prices are reaching their pre-Covid-19 levels, which will translate to price hikes over the coming months if trends stay unchanged.

"The USA’s domestic oil production tailed off in the wake of the petroleum glut at the height of the Covid-19 first wave in 2020, but information from the US Energy Information Administration (EIA) is showing that US inventories have dropped back into a normal range," the AA said.

"If US production doesn’t catch up with the falling inventory, the oil price will come under further pressure," it said.

April will also see tax hikes around fuel come into effect, with a significant addition of 26 cents a litre to fuel prices because of increases to the General Fuel and Road Accident Fund levies. These were announced by National Treasury in the 2021 budget speech.