The official fuel price revisions will take effect on Wednesday, January 5, 2022, according to the Department of Energy.
This month, all grades of fuel will see price reductions, with petrol falling between 68 and 71 cents per litre and diesel falling between 67 and 69 cents per litre.
List of changes:
The fluctuation of pricing is influenced by two key factors: international petroleum costs and the exchange rate between the rand and the dollar.
Gwede Mantashe, Minister of Mineral Resources and Energy, stated that the rand depreciated on average versus the US dollar during the period under review (from R15.40 to R15.92/dollar). This resulted in an increase of nearly 29 cents per litre in contributions to the basic fuel costs of gasoline, diesel, and illuminating paraffin.
During the time period under consideration, however, the average Brent Crude oil price fell from $83 to $76 per barrel.
According to the minister, a 2.20 c/l rise will be imposed in the pricing structures of gasoline and diesel starting on January 5, 2022, in accordance with the Self-Adjusting Slate Mechanism guidelines.
According to the Self-Adjusting Slate Mechanism Rules, the Slate Levy is utilized to compensate the industry for cumulative under-recovery.
The Automobile Association (AA) reported that the rand has gained against the US dollar, moving away from mid-December lows when concerns about the economic impact of travel bans enforced as the Omicron version of Covid-19 swept the globe.
The rand has since clawed its way back to roughly R15.88, up forty cents from its mid-December low, according to the AA.
The AA also stated that net oil prices for December have improved.
“Through the first three weeks of December, benchmark worldwide oil prices were basically unchanged, however they surged back above $70 a barrel on concerns about the impact of the Omicron variation,” it stated.
With Omicron causing high infection rates in the Northern Hemisphere, there’s a chance that consumer and industrial demand for petroleum products will fall, as witnessed in the early waves of Covid-19 in 2020, according to the organization.
“In the short to medium term, this could result in a lower oil price.” If this is the case, South African petroleum users will be relieved. However, this should not obscure the fact that current fuel costs are still significantly higher than those paid by South Africans just a few months ago.”
According to the AA, the present high fuel costs must continue to drive a review of the fuel price system, as well as an audit of the existing prices within that structure.
“We were glad that our petitions in this regard were heard by Mr Enoch Godongwana, Minister of Finance.” We applaud his pre-Christmas remarks that the fuel pricing structure has to be re-examined, and we urge him to act quickly on this matter before his February 2022 Budget Speech.
“We’d like to see a statement on concrete intentions to review the fuel price before the end of the second quarter,” the AA stated.