PETROL SHOCKER: Inland price spurts over R16/litre

Both grades of petrol, 93 and 95 (ULP & LRP), will increase by 26 cents and 23c a litre respectively on Wednesday, the  Department of Energy announced on Sunday.

The spike would have been 20c a litre more if it wasn't for declining oil prices, Energy Minister Jeff Radebe said in a statement on Sunday.

Diesel 0.05% sulphur and diesel 0.005% sulphur will increase by 26c and 24c a litre respectively.

Illuminating paraffin (wholesale) will go up by 22c, while illuminating paraffin (SMNRP) will cost 30c more per litre.

The maximum retail price for LPGAS will spike by 37c per kilogram.

The DoE ascribed the huge spike in fuel prices to a weaker rand.

The rand depreciated, on average, against the US dollar  - from R12.51 to R13.29 against the greenback - during the period under review.

"This led to a higher contribution to the Basic Fuel Prices on petrol, diesel and illuminating paraffin by 43.21c/l, 44.36c/l and 44.62c/l respectively."

The latest hike has taken the per litre price of petrol further into record territory, with motorists now having to fork out R15.53 and R16.02 for a litre of 95 octane unleaded petrol on the coast and inland respectively.

The Automobile Association (AA) said on Thursday South Africans have been thrown a lifeline by declining oil prices in June, but not enough to avert another hike in fuel prices.

According to Radebe the lower crude oil prices cushioned the consumers from higher fuel price by close to 20c/litre.

The average Brent Crude oil price decreased from US$77 to $74 per barrel during the period under review, the DoE said.

"The main reason for the lower crude oil prices is that the Organisation of Petroleum Exporting Countries (OPEC) and its allies agreed to increase production in order to retake market share from rivals and to calm prices to avoid blunting demand growth during their meeting on 22 June 2018."

Radebe said the rand’s movements were mainly influenced by global factors. "The market has started to become worried about the effect that the trade war between the USA and China will have on the global economy," he cautioned.

On Friday, the rand closed at R13.71/$, while Brent crude oil traded at $79 a barrel.

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