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Drop in fuel price one small relief in January 2023

Drop in fuel price one small relief in January 2023
Georgina Crouth
By Georgina Crouth
3 Jan 2023
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Petrol, diesel and paraffin are down sharply this month, but the gas price will be raised.

Petrol, diesel and illuminating paraffin prices are down markedly, bringing consumers some relief during the most difficult time of year: January.

The Mineral Resources and Energy Department has announced a R2.06/litre reduction in the price of both 93 and 95 octane petrol; R2.68 in 0.05% sulphur diesel; R2.80/litre in 0.005% sulphur diesel; R1.93 for wholesale illuminating paraffin (IP) and R2.58/l for retail IP.

However, for those cooking (and heating) with gas, the price of LP gas will increase by 82c/kg. 

The adjustments are effective from Wednesday.

Minerals and Energy Minister Gwede Mantashe attributed the fuel price adjustments to the following:



  1. Crude oil price




The average Brent Crude oil price decreased from $88.77 per barrel to $85.08 per barrel during the period under review. The oil prices continued to drop due to fears of economic recession globally.


  1. International petroleum product prices




The movement in international refined petroleum product prices, diesel, petrol and IP followed the decreasing trend in crude oil prices, while the prices of LP gas increased due to higher propane and butane prices.


  1. Rand-dollar exchange rate




The rand appreciated slightly, on average, against the dollar (from R17.53 to R17.28) during the period under review, leading to lower contributions to the basic fuel prices of petrol, diesel and IP.



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  1. The slate levy




A slate levy decrease of 21.90 c/l (from 83.28 c/l to 61.38 c/l) will be implemented into the price structures of petrol and diesel, in line with the self-adjusting slate mechanism rules effective from 4 January 2023. 

The slate levy — a self-adjusting mechanism that the government added to the fuel price calculation in August 2021 to deal with daily fluctuations in petrol prices — is one of seven levies imposed on fuel for vehicles. It is the only levy that doesn’t go to the state: instead, the money collected through it goes to the fuel companies.

  1. Octane differentials between 95 and 93 petrol grades


The basic fuels price differential between 95 and 93 octanes is adjusted on the first Wednesday of each quarter. The BFP octane differential remains unchanged.

In a statement welcoming the price reductions, the Automobile Association said on Friday, 30 December, that the reductions would bring the price of 95 unleaded petrol inland to around R21.57/l and R20.92/l at the coast — prices last seen in March 2022. 

“The forecast reduction in the wholesale price of diesel will bring this fuel cost down to around R21.47/l. These reductions are certainly good news for all consumers and signal a positive start to fuel pricing for the new year,” said the AA.

“These decreases will not take fuel prices to levels seen in January 2022 but will, nonetheless, go a long way to alleviating the fuel price burden — and its associated impact on other prices — felt by millions of South Africans. For many travellers who are currently on [holiday] this is also good news as it will undoubtedly reduce expenses on the return leg of their journeys.” BM/DM

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