Petrol prices: Here’s how much a litre will cost from Wednesday, 7 August 2024

Story Summary:

• Petrol prices are set to decrease by 15.00 cents per litre.
• Diesel prices will also see a decrease, with 0.05% sulphur diesel dropping by 28.00 cents per litre and 0.005% sulphur diesel decreasing by 17.00 cents per litre.
• Illuminating paraffin prices will decrease by 22.00 cents per litre.

The Central Energy Fund (CEF) announced that from Wednesday, 7 August 2024, South African motorists will benefit from a decrease in petrol and diesel prices.

Petrol prices: Here’s how much a litre may cost from Wednesday, 7 August 2024

PLEASE NOTE: The petrol price adjustments listed below are directly quoted from the Department of Energy’s monthly press release. Despite our best efforts to ensure accurate reporting, it is still the sole responsibility of the reader to double-check petrol prices. Swisher Post, its parent company, partners and affiliates shall not be held liable for any consequence that arises from the journalistic duties performed in sharing this content.

Both grades of petrol, 93 and 95 (ULP and LRP), will see a reduction of 15.00 cents per litre in their retail price.

Diesel prices are set to drop as well, with 0.05% sulphur diesel decreasing by 28.00 cents per litre and 0.005% sulphur diesel by 17.00 cents per litre.

Additionally, illuminating paraffin will decrease by 22.00 cents per litre, while the single maximum national retail price (SMNRP) for illuminating paraffin will drop by 29.00 cents per litre.

The maximum retail price for LPGAS will also see a reduction of 14.00 cents per kilogram​​.

Here is a look at the estimated petrol price changes expected on Wednesday, 7 August 2024:

Inland

Coastal

Factors impacting petrol prices in August 2024

Several factors contributed to the decrease in fuel prices for August 2024.

The average international product prices for petrol, diesel, and illuminating paraffin decreased during the review period from 28 June 2024 to 1 August 2024.

This decline in international prices played a significant role in reducing the cost of these fuels domestically.

Another critical factor was the appreciation of the rand against the US dollar.

During the review period, the average rand/dollar exchange rate improved from 18.4439 to 18.2360. This stronger Rand led to lower contributions to the basic fuel prices on petrol, diesel, and illuminating paraffin by approximately 13.86 cents per litre, 13.80 cents per litre, and 14.01 cents per litre, respectively​​.

The CEF also highlighted the impact of the Self-Adjusting Slate Levy Mechanism, which maintains the slate levy on petrol and diesel at 0.00 cents per litre due to a non-negative slate balance.

This mechanism helps manage the cumulative balance of over- or under-recoveries from previous months, ensuring price adjustments are as accurate as possible.

The combination of lower international product prices and a stronger rand has resulted in the forthcoming decrease in petrol and diesel prices, providing some relief to consumers amid fluctuating global economic conditions.

Fuel-saving tips to cushion the blow

To mitigate the impact of rising fuel costs, consumers can adopt several fuel-saving strategies.

Regular vehicle maintenance, such as ensuring tyres are properly inflated, can improve fuel efficiency. Planning routes to avoid congestion and reduce idle times, along with adopting smoother driving habits, can also lead to significant savings.

Additionally, carpooling and the use of more fuel-efficient vehicles or alternative modes of transportation, such as cycling or public transport, can further help manage and reduce overall fuel expenditure.

Currency Fluctuations and International Prices

The recent period between 02 February 2024 and 29 February 2024 saw a depreciation of the Rand against the US Dollar, moving from an average of 18.7655 to 19.0186.

This depreciation, alongside increases in the average international product prices for Petrol, Diesel, and Illuminating Paraffin, contributed to higher Basic Fuel Prices.

These economic factors are instrumental in determining the cost adjustments, impacting both the industry and the consumer market.

Retail and Refinery Cap Adjustments

The Single Maximum National Retail Price (SMNRP) for illuminating paraffin was set at 2,137.0 c/l for the period leading up to 02 April 2024, marking an increase from the previous period’s price cap.

Additionally, the Maximum LPGas Refinery Gate Price was determined to be R 15,387.93 per metric ton, excluding VAT, for the same period, indicating a strategic pricing decision aimed at stabilizing the LPGas market.

What goes into the final retail price of fuel in South Africa?

Determining the final retail price of petrol in South Africa relies heavily on the rand’s performance in currency markets and oil price movements.

Using this information, the CEF can formulate basic fuel price (BFP) estimates which, in essence, offer South African importers a snapshot into the cost of buying petrol from an international refinery, transporting the product and ensuring it against possible losses at sea and on land.

However, before the retail price of petrol is finalised at petrol stations, several additional costs are included in the BFP:

Government levies

• IP tracer levy (reimbursement to the oil industry for buying IP tracer dye and injecting it into IP to curtail the mixing of IP and diesel)
• General Fuel levy (tax levied by the government)
• Slate levy (to finance the cumulative under-recovery of the industry)
• RAF levy (to compensate for people involved in road crashes and accidents)
• Petroleum products levy (reimbursement to the pipeline users for the applicable NERSA tariff on transporting fuel through the pipeline)

Additional costs

• Wholesale margin (markup to the price of a product to account for wholesaling costs)
• Service cost recoveries
• Storage, handling and delivery costs
• Distribution costs
• Dealers margin (commission to the fuel pump dealers for retail operation)
• Zone differential (applicable to inland regions)
• Customs and excise duty

Petrol price adjustments are generally made on the first Wednesday of every month by the Department of Energy.