Retail price of fuel to rise significantly

THE retail price of petrol will increase by up to R1.72 a litre from today and the wholesale price of diesel will rise by as much as R1.73, the department of mineral resources and energy said.

The department said the retail price of illuminating paraffin, which millions of poor South Africans still rely on for cooking and lighting, would go up by R2.85.

Fuel prices are adjusted every month, based on global oil prices and the value of the rand currency.

Adjustments are made in such a manner that the over- or under-recovery during the prior month is corrected the following month.

Yesterday, the energy department said the average international prices for petrol, diesel and illuminating paraffin had increased during the period under review.

The rand had appreciated against the US dollar, on average, when compared to the previous period, leading to a lower contribution to the basic prices.

Also from today, the maximum retail price for petroleum gas will rise by R4.48 per kg.

The mineral resources and energy department said its minister had approved the utilisation of the Saudi contract to calculate the import price of LPG, to be implemented with effect from July 1.

South African LPG imports originate from either Houston in the United States or Ras Tanura in Saudi Arabia.

The price of LPG in the US is at times cheaper than that in the Middle East due to seasonality but, because of the longer voyage from the US to South Africa, it could cost more to land at South African ports.

Neil Roets, chief executive of debt counselling firm Debt Rescue said the increases would have a devastating impact on consumers.

“Following the disastrous shutdown of the economy due to Covid19, we need this like a hole in the head at the moment,” he said.

“While we fully understand that this is outside the control of the government, it is nonetheless going to slow down any hopes of a revival of South Africa’s economy, battered by the shutdown.

Roets said there had been a dramatic increase in clients, on the verge of bankruptcy, seeking help from debt counsellors.

“There are not going to be any bailouts from government simply because they have run out of money.

“The private sector is in business to make money so don’t expect any bailouts from them either,” he said.