South African fuel prices will hit record highs as of Wednesday, with the price of petrol spiking to over R19.50 a litre in the economic hub of Gauteng and other inland provinces.
This comes as the Department of Mineral Resources and Energy (DMRE) announced on Monday night that the price of petrol (both 93 and 95 ULP & LRP) will increase by R1.21 a litre and diesel (0.05% and 0.005% sulphur) by R1.48 a litre as of November 3.
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According to the DMRE, illuminating paraffin (wholesale) will increase by R1.45 per litre, while illuminating paraffin (SMNRP) will surge by R1.93 a litre. The maximum LPGas retail price will rocket by R2.90 a kilogram.
The surge in fuel prices comes largely on the back of the spike in international crude oil prices and a weakening rand.
@DMRE_ZA just announced *MASSIVE* fuel increases for Nov: R1.21 for petrol & R1.48 for diesel (record increases) which push fuel into record highs. 1 litre of petrol inland will now cost you R19.50+ (at least R6.11 goes to taxes) @AASouthAfrica @Philip_Purnell #PetrolPrice
— Layton Beard (@LaytonBeard) November 1, 2021
This will put even more pressure on the South African Reserve Bank to hike interest rates when its Monetary Policy Committee meets later this month.
The latest fuel price increases announced by the DMRE are even higher than those forecast by the Automobile Association in October.
In its statement, the DMRE noted that the price of Brent crude oil reached its highest level since October 2018.
“The average Brent crude oil price increased from $75.50 to $83.40 per barrel during the period under review [October 1 to October 27] … The key driver is the higher global demand recovery amid a weaker supply response from non-Opec and other oil producers,” said the department.
“The situation was exacerbated by the impact the current gas challenges experienced by European countries are having on the prices of energy commodities,” it added.
The DMRE also noted that the rand depreciated (on average) against the US Dollar, from R14.56 to R14.72, during the period under review.
“This led to higher contributions to the Basic Fuel Prices of petrol, diesel and illuminating paraffin by over 15 cents per litre,” it said.
The department pointed out that the fuel prices schedule for the different zones (coastal and inland provinces) would be published later on Tuesday (November 2, 2021).