While international pricing elements point to South Africa’s fuel prices decreasing for the month of April, other local adjustments such as transport costs and levies might cause prices to increase, Department of Energy (DoE) hydrocarbons operations director Robert Maake said at a media briefing on Thursday.

The DoE said, in a fuel-price adjustment fact sheet provided to the media, that brent crude oil prices had decreased on average from $109/bl to $106/bl since the start of the current fuel price review period, February 28 to March 28, mainly owing to poor preliminary purchasing managers’ index data, which indicated that the demand in China was going to slow down over the next few months.

Further, the international refined petroleum product prices of petrol, diesel and illuminating paraffin decreased sharply during the period.

This could be attributed to the commissioning of North American energy company TransCanada’s Cushing Market-link pipeline – which was now moving crude oil from Cushing to the US Gulf Coast ¬ contributing to supply in the region, as well as to the expanded pipeline infrastructure and rail deliveries that made it possible for crude oil to bypass Cushing storage and move directly to oil refining centres in the East and West Coast, thereby creating an oversupply of crude oil.

The DoE also pointed out that the rand had appreciated against the dollar from R11.54 a dollar to R10.76 a dollar during the fuel price review period.

These elements all contributed to the basic fuel price (BFP), however, South Africa’s fuel price was also made up of local factors which could “offset whatever the benefit of the BFP recovery will be,” Maake said.

These factors, for the month of April, included fuel levy and road accident fund increases, the adjustment that had to be made to road and pipeline transport tariffs and the adjustment of differentials between 95 and 93 octane fuel, he said.

Finance Minster Pravin Gordhan, in his 2014 Budget Speech on February 26, announced a 12c/ℓ increase in the fuel levy and a 8c/ℓ increase in the road accident fund levy, which would be applicable to the price structures of petrol and diesel with effect from April 2.

Further, road and pipeline transport tariffs would also be adjusted next month. These adjustments would be based on the Vehicle Cost Schedule of the Road Freight Association and on the revised and approved petroleum pipeline transport tariffs announced by the National Energy Regulator.

However, Maake explained that the magnitude of the increases would differ between the country’s various fuel zones, depending on how far they were situated from the fuel supply area.

He also pointed out that these levies and transport tariffs were only adjusted once a year.

Meanwhile, the April fuel price changes would also differ between 95 and 93 octane fuel.

In line with the working rules to determine the BFPs, the 95 octane unleaded grade was used as the price-marker grade, with the BFP differentials between the two grades only being adjusted once every quarter.

Further, Maake also said that, as a result of the approval of the termination of the Incremental Inland Transport Recovery System levy by Transport Minister Ben Martins, 3c/ℓ would be subtracted from all fuel prices with effect from April 2.

The DoE could not, at the media briefing, provide specific figures on the fuel price changes for April; however, this information was expected to be released to the public on Friday.