“Fuel Prices Soar: Steep Diesel and Petrol Hikes Take Effect at Midnight”
Diesel and petrol prices will see large hikes on Wednesday as the rand and oil price moved against local motorists over recent weeks.
Unleaded petrol (both 93 and 95) will be increased by 82c a litre. The wholesale price of diesel will be hiked by between R1.01 and R1.05 a litre, depending on the sulphur content.
The wholesale price of illuminating paraffin will be increased by 96c, while the maximum LPGas retail price will rise by 42.c/kg.
South African fuel prices are largely determined by the oil price and the rand exchange rate, as oil is priced in dollars.
In a statement on Tuesday, the department of mineral and petroleum resources said the average price of Brent oil increased from $72.78 a barrel to $77.41 over the past month.
“The main contributing factors (were) increased demand due to cold weather in the Northern Hemisphere (and an) anticipated increase in demand for oil from China following economic stimulation policies. On the other hand, supply was affected by the OPEC+ decision to delay production increases until April 2025 as well as new sanctions against Russia and Iran, which could further constrain supply and result in higher freight rates.”
Meanwhile, the rand took a big hit, weakening from R18.11/$ to R18.73 over the past month.
This was due in part to tension between GNU partners over the Expropriation Bill, which unnerved investors. The dollar is also benefitting from expectations that US interest rates will stay higher for longer, which will offer traders better investment returns at lower risk than the rand. Risk-averse investors have also piled into the dollar as a safe haven amid volatility created by the administration of US president Donald Trump.
On Monday, the rand hit R19/$ after Trump threatened to punish South Africa over its domestic policies.
