Impact Of August Fuel Price Increase Explained



The cost of fuel has increased and motorists will have to dig deeper into their pockets to fill up their vehicle's tanks. However, not only motorists and vehicle owners will be affected by the most recent fuel price increase. 



The price of all grades of petrol and diesel, along with the price of illuminating paraffin, increased on the first Wednesday of August 2023. While motorists enjoyed some reprieve at the pumps during the last three months as the price of petrol fell, the new month brought a painful increase. 

These fuel price adjustments were confirmed by the Central Energy Fund (CEF) days before the new prices were charged at fuel stations and service providers around the country. 

Fuel Price Adjustments For August 2023

  • Both grades of petrol (93 and 95 Octane) increased by 37 c/l
  • Diesel (0.05% sulphur) saw a 72c/l increase.
  • The price of 0.005% sulphur Diesel saw a 71c/l increase.
  • Wholesale illuminating paraffin was increased by 71c 
  • Single Maximum National Retail Price for illuminating paraffin saw a 95c increase.
  • Maximum Retail Price of LPGas saw an R1.61 decrease

The Department of Mineral Resources and Energy (DMRE) explained that Several factors contributed to an increase in the price of fuel in August. The average price of Brent Crude oil increased during the period of review which had significant impacts on the price of petrol, diesel and illuminating paraffin. 

During the latest review period, the average Brent Crude oil price surged from $75.10 USD to $79.75 USD, causing significant impacts on the Basic Fuel Prices of petrol, diesel, and illuminating paraffin. 

Notably, petrol prices witnessed an increase of 63.59 c/l, while diesel and illuminating paraffin rose by 99.09 c/l and 98.71 c/l, respectively. In contrast, LP Gas prices saw a decrease, attributed to lower prices of Propane and Butane.

The Rand demonstrated strength against the US Dollar working in consumers' favour to improve from R18.68 to R18.26 per USD during the review period. This resulted in reduced contributions to the Basic Fuel Prices of petrol, diesel, and illuminating paraffin, with respective reductions of 27.64 c/l, 27.36 c/l, and 27.10 c/l respectively. 

The DMRE also announced that no slate levy would apply to the petrol and diesel price structure for August 2023.

Crude oil prices are influenced by several factors including supply and demand dynamics, geopolitical events, actions from organisations like OPEC and non-OPEC nations, economic conditions, and currency exchange rates. This intricate combination of factors manifests as price fluctuations and volatility in the global oil market.

The Automobile Association (AA) Layton Beard highlighted the importance of diesel in various economic sectors including retail, agriculture, and manufacturing. Even if a person does not purchase diesel directly, the increases in the cost of production in these economic sectors are eventually passed on to consumers.

We know it [diesel] is such an important fuel in so many different sectors and many people are using it to power generators so when that fuel price goes up the retail sector, the agricultural sector, manufacturing, you name… people who are absolutely reliant on this fuel are going to see an immediate impact on their bottom line and they're going to recover those costs by passing them on to consumers.

The price of all fuels is adjusted monthly in South Africa. These fuel price adjustments are announced shortly before they are implemented on the first Wednesday of every month. 

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