Fuel price: Big petrol and diesel DROP
The latest fuel price drop for January 2024 is excellent news for both petrol and diesel car owners.
Motorists will breathe a sigh of relief at the pumps as the price of petrol is set to come down by between 62 and 76 cents a litre.
According to the Minister of Mineral Resources and Energy Gwede Mantashe, 93 (ULP & LRP) will decrease by 62 cents a litre, while the price of 95 (ULP & LRP) will decrease by 76 cents a litre.
This means that a litre of 95, which currently costs R23.25 in Gauteng, will come down to R22.49.
The price of Diesel (0.05% sulphur) will come down by 118.32 cents a litre.
The price of Diesel (0.005% sulphur) will come down by 126.32 cents a litre and the price of Illuminating Paraffin (wholesale) will decrease by 93 cents per litre and the Single Maximum National Retail Price (SMNRP) for illuminating paraffin will come down by R1.24 per litre.
The fuel price adjustments were due to crude oil prices, international petroleum product prices; the Rand/US Dollar exchange rate; the implementation of the Slate Levy, and the octane differential between 95 and 93 petrol grades.
The average Brent crude oil price decreased from 82.62 US Dollars (USD) to 77.35 USD during the period under review, mainly due to, increased production by the United States of America, Venezuela, Guyana, and other non-OPEC countries despite the announcement by OPEC (Organization of the Petroleum Exporting Countries) to cut production.
“The average international product prices of petrol, diesel and illuminating paraffin decreased in line with the lower crude oil prices. LPG prices increased due to higher freight costs. These factors led to lower contributions to the Basic Fuel Prices of petrol, diesel and illuminating paraffin by 50.83 cents a litre, 105.81 cents a litre and 99 cents a litre, respectively,”
In addition, the Rand depreciated slightly on average, against the US Dollar (from 18.57 to 18.66 Rand per USD) during the period under review when compared to the previous one.
This led to higher contributions to the Basic Fuel Prices of petrol, diesel and illuminating paraffin by 5.30 c/l, 5.83 c/l and 6.00 c/l, respectively.
On the implementation of the slate levy, the Department of Mineral Resources and Energy said the cumulative slate balance on petrol and diesel at the end of November 2023 had a positive balance of R1.8 billion.
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“Therefore, a slate levy of zero cents a litre will be implemented in the price structure of petrol and diesel with effect from the 3rd of January 2024. This means that the motorists will benefit by 26.32 cents per litre since the slate levy will decrease from 26.32 to zero cents per litre.”
In line with the Working Rules to determine the Basic Fuels Prices (BFP), the 95 octane (unleaded) grade is the price-marker grade and the BFP-differential between 95 and 93 octanes is adjusted on the first Wednesday of each quarter.
The BFP octane differential has changed during the previous quarter and therefore the retail prices of 95 and 93 petrol octanes will be different in each fuel-pricing zone with effect from the 3rd of January 2024.