Fuel prices expected to decrease

Monday, June 5, 2023

Cash strapped consumers will experience some relief at the pumps this week when the price of all grades of petrol and diesel decreases.

The price of paraffin will also decrease, with an increase in the price of gas.

Fuel price adjustments as announced by the Department of Mineral Resources and Energy (DMRE) are as follows:

  • Both grades of petrol will decrease by 71c.
  • Diesel 0.05% sulphur will decrease by 84c.
  • Diesel 0.05% sulphur will go down by 80c.
  • Wholesale illuminating paraffin will cost 43c less.
  • The Single Maximum National Retail price for illuminating paraffin will decrease by 58c.
  • The Maximum LP Gas Retail Price will increase by 75c.

“The average international product prices of petrol, diesel and illuminating paraffin followed the decreasing trend of crude oil prices during the period under review, while the price of LPG increased.

“Petrol and diesel prices decreased, even though there is increased demand ahead of the driving season in the Northern Hemisphere. LPG prices increased due to the increase in the prices of Butane.

“These factors led to lower contributions to the Basic Fuel Prices of petrol, diesel and illuminating paraffin by 125.11 c/l, 133.83 c/l and 94.95 c/l, respectively,” the department said.

The DMRE added that the decrease in the cost of Brent Crude Oil also contributed to the lowered fuel prices.

According to the department, the factors leading to this include:

  • The release of the Chinese Purchasing Managers Index (PMI) data, which has decreased, indicating lower economic growth. On the other hand, demand for crude oil imports to China is increasing, although at a slower pace compared to April 2023.
  • The collapse of a third bank in the US (First Republic Bank), which created uncertainty and fears of another financial crisis.
  • The passing of the US debt ceiling bill, which indicates the ability of the US government to meet financial obligations. The conclusion cushioned crude oil prices from decreasing further.
  • The unexpected inventory builds despite OPEC+ production cuts announced in April 2023. The market is uncertain if further cuts will be discussed at the upcoming meeting in June 2023.

The price adjustments will be effective from Wednesday. – SAnews