Categories: EnergyNews
| On
2023-12-04 12:33 PM

South Africa Welcomes Significant Fuel Price Decrease in December

    • Substantial Fuel Price Cuts: South Africa anticipates a noteworthy reduction in petrol and diesel costs, with decreases of up to 65 cents per litre and R2.35-R2.41 per litre, respectively, offering considerable relief to motorists.
    • Factors Impacting Price Adjustments: International product price declines, including crude oil, contributed to the drop in fuel prices. Diesel and illuminating paraffin saw more pronounced decreases due to increased production to meet winter demand, while LPG prices surged due to seasonal demand shifts.
    • Government Measures and Impact: The Department of Mineral Resources and Energy's intervention, including slate levy adjustments and margin increases, aims to balance fuel prices amidst the Rand's appreciation against the USD, aiming to alleviate economic burdens for South African consumers and businesses.
By Miriam Matoma

The Department of Mineral Resources and Energy has announced substantial decreases in fuel prices for December 2023, offering a welcomed respite for South African motorists. With a significant cut set to take effect from December 6, this adjustment brings relief in both petrol and diesel costs across the country.

Petrol prices are slated for a considerable drop of 65 cents per litre, while diesel prices are expected to decrease between R2.35 and R2.41 per litre.

Fuel Price Adjustments:

  • Petrol 93: Decrease of 65 cents per litre
  • Petrol 95: Decrease of 65 cents per litre
  • Diesel 0.05% (wholesale): Decrease of 235 cents per litre
  • Diesel 0.005% (wholesale): Decrease of 241 cents per litre
  • Illuminating Paraffin: Decrease of 171 cents per litre
  • LPGAS: Increase of 167 cents per kg

The drop in fuel prices aligns with the downward trend observed in November, following the decline in international product prices of petrol, diesel, and illuminating paraffin. This dip can be attributed to the decrease in crude oil prices, with diesel and illuminating paraffin experiencing a more pronounced decline due to increased production to meet the expected winter demand in the Northern Hemisphere.

Conversely, LPG prices have risen due to increased demand for propane and butane, reflecting seasonal changes in market dynamics.

Factors Contributing to Price Changes:

  • Lower contributions to Basic Fuel Prices: Petrol (-66.15 c/l), Diesel (-192.98 c/l), Illuminating Paraffin (-147.46 c/l)
  • Appreciation of the Rand against the USD: Contributing to reduced Basic Fuel Prices – Petrol (-33.11 c/l), Diesel (-36.95 c/l), Illuminating Paraffin (-37.68 c/l)

Additionally, the cumulative slate balance on petrol and diesel as of October 2023 shows a negative balance of R3.1 billion, leading to a decrease in the slate levy to 26.32 c/l – a substantial drop from the previous month.

The application of the Regulatory Accounting System (RAS) has prompted the Minister of Mineral Resources and Energy to approve a net increase of 60.1 c/l in annual margin adjustments on petrol. For diesel and illuminating paraffin wholesale prices, there will be a net increase of 13.88 c/l, effective from December 6, 2023.

The following table demonstrates the anticipated changes at the pumps (wholesale prices for diesel; actual pump prices may vary):

Inland – November Official – December Official:

  • 93 Petrol: R23.44 – R22.79
  • 95 Petrol: R23.90 – R23.25
  • Diesel 0.05%: R24.17 – R21.82
  • Diesel 0.005%: R24.40 – R21.99
  • Illuminating Paraffin: R17.95 – R16.24
  • LPGAS (per kg): R35.75 – R37.42

Coastal – November Official – December Official:

  • 93 Petrol: R22.72 – R22.07
  • 95 Petrol: R23.18 – R22.53
  • Diesel 0.05%: R23.44 – R21.09
  • Diesel 0.005%: R23.71 – R21.30
  • Illuminating Paraffin: R17.02 – R15.31
  • LPGAS (per kg): R33.16 – R34.46

These changes are expected to bring significant relief to South African motorists, reducing the cost burden at a time when economic pressures are felt across various sectors. The substantial drop in petrol and diesel prices particularly stands to positively impact daily commuters and businesses reliant on transportation, offering a reprieve in their operational expenses.

The Department of Mineral Resources and Energy continues to monitor global market fluctuations and local economic conditions, aiming to maintain a balance that benefits both consumers and the energy sector.

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Miriam Matoma

Miriam is a freelance writer, she covers economics and government news for Rateweb. You can contact her on: Email: Twitter: @MatomaMiriam

Tags: Fuel Price