Photo by: Bloomberg
The price of petrol will increase by 49c a litre on Wednesday 2 May, Minister of Energy Jeff Radebe announced on Thursday afternoon.
Diesel (0.05% Sulphur) will increase by 59c/l increase, while diesel with 0.005% Sulphur will go up 58c/l.
The wholesale price of illuminating paraffin will increase by 52c/l, whereas the single maximum national retail price (SMNRP) of illuminating paraffin will increase by 69.00c/l. The maximum retail price of LPGas will increase by 70c/kg.
The main reason for the fuel price adjustments, according to a statement by Radebe, is due to the contribution of the rand/dollar exchange rate.
"The rand’s movements were mainly influenced by global factors. The rand went through a period of volatility in April, mainly due to concerns over the China/US trade tariff dispute that put pressure on the currencies of emerging markets, including SA," according to the statement.
Another reason is the increase in the prices crude oil. The average Brent Crude oil price increased from $65.71 to $70.36 per barrel during the period under review. The US crude oil inventories dropped by 1.1-million barrels, because of a decline of 1.3-million barrels per day (bpd) in net crude imports.
The crude oil market also found support in expectation that the Organisation of the Petroleum Exporting Countries (OPEC) production cuts will be sustained. OPEC and 10 rival producers have curbed output by a joint 1.8-million bpd since January 2017 and pledged to do so until the end of this year.
A third reason given for May's fuel price increase is that international prices of petroleum products increased on average during the period under review. This was in line with the higher crude oil prices.