South African motorists will pay more for petrol from Wednesday after the government announced a sharp increase in pump prices, even as reductions in fuel levies and lower diesel costs provide some relief to consumers and businesses.
The Department of Petroleum and Mineral Resources said petrol prices would rise by R1.43 (US$0.09) per litre for both grades of fuel, reflecting higher international oil prices during the latest review period.
The increase comes as global energy markets remain volatile amid geopolitical tensions in the Middle East, which have pushed crude oil prices higher and raised concerns about supply disruptions.
In contrast to petrol, diesel prices will decline significantly. The wholesale price of diesel containing 0.05 percent sulphur will decrease by R3.24 per litre, while diesel with 0.005 sulphur will fall by R2.61 per litre.
Other fuel products are also set to become cheaper. The wholesale price of illuminating paraffin will drop by R5.96 per litre, while its maximum retail price will decrease by R7.95 per litre. Liquefied petroleum gas (LPG) will fall by R0.17 per kilogramme nationally and by R0.20 per kilogramme in the Western Cape.
The department said the mixed price adjustments reflected differing trends in global fuel markets.
According to officials, Brent crude oil prices increased from an average of US$101 per barrel to US$104.59 during the review period, largely driven by renewed tensions between the United States and Iran as well as the closure of the Strait of Hormuz, one of the world’s most important oil shipping routes.
The Strait of Hormuz handles a significant share of global crude oil exports, and any disruption to traffic through the waterway tends to trigger concerns about supply shortages and higher energy prices worldwide.
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The rise in crude prices translated into higher international petrol prices, placing upward pressure on domestic fuel costs.
However, middle-distillate fuels such as diesel experienced a different trend. The department said international diesel prices declined as seasonal demand in the Northern Hemisphere eased, resulting in lower wholesale costs.
Similarly, freight rates for propane and butane — key components used in the production of LPG — fell during the review period, contributing to lower gas prices.
South Africa’s currency also provided some support to fuel consumers.
The rand strengthened modestly against the US dollar, improving from an average of R16.65 per dollar to R16.52 during the pricing review period. A stronger local currency lowers the cost of importing fuel products, which are purchased in dollars.
According to the department, the stronger rand reduced the contribution to the basic fuel price by between R0.12 and R0.15 per litre across petrol, diesel and paraffin products.
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In a move aimed at easing the burden on consumers, the government will simultaneously reduce the general fuel levy from Wednesday. The levy on petrol will be cut by R1.50 per litre, while diesel will receive a larger reduction of R1.96 per litre.
The fuel levy is one of the largest tax components included in South Africa’s pump prices and serves as an important source of government revenue. Any reduction is typically welcomed by motorists and transport operators, who have faced elevated fuel costs in recent years.
Despite the levy relief, motorists using petrol-powered vehicles will still face higher overall costs at the pump because of the sharp increase in international fuel prices.
The latest adjustment highlights the continued influence of global market developments on South Africa’s energy costs, with international crude prices, exchange rate movements and government taxes remaining key determinants of domestic fuel prices.
For businesses reliant on diesel-powered transport and logistics operations, however, the substantial reduction in diesel prices is expected to provide some relief and help ease operating expenses in the months ahead.
