Petrol price u-turn: Here’s why costs will increase again at midnight

What a difference five cents makes. South Africa finished the month believing that the petrol price would decrease for the first time in three months. Instead, they’ve been hit with another increase – as confirmed by the Department of Energy.

‘Government u-turn’ surprises motorists

The increase, at least, is as small as it can possibly get: Just one cent will be added on to our existing petrol price. But, after weeks of sitting in pole position to bring prices down, this still feels like a loss for the motorists of Mzansi.

According to the government, the Rand’s weakened performance against the US Dollar has helped tip the scales:

“The Rand depreciated against the US Dollar during the period under review, compared to the previous period. The average Rand/US Dollar exchange rate for the period 31 July to 27 August was R17.28 compared to R16.82 during the previous period. This led to a higher contribution to the Basic Fuel Prices on petrol, diesel, and illuminating paraffin.”

Central Energy Fund statement

Why is the petrol price increasing this month?

However, even with ZAR’s erratic behaviour, South Africans were still on course for a marginal decrease of four cents per litre. But that step in the right direction has been scuppered – after the Energy Department decided to add 5.3 cents to the wholesale petrol price “to accommodate wage increases at petrol stations”. That five-cent swing has proved to be the difference between an increase and decrease in costs:

“The Minister of Mineral Resources and Energy has approved a retail margin increase of 5.3 c/l to be effected in the retail price structures of all octane grades of petrol with effect from 02 September 2020. This increase is necessary to accommodate the wage increases of pump attendants, cashiers, and administrative staff at service stations.”

Central Energy Fund statement

Petrol price changes for September 2020

We suppose things could have been much worse for the petrol price. Plus, diesel and illuminating paraffin consumers will see decreases this month. The changes will come into effect from 00:01 on Wednesday 2 September.

• Petrol 93: Increases by one cent
• Petrol 95: Increases by one cent
• Both grades of diesel: Decreases by 21 cents
• Illuminating paraffin: Decreases by 26 cents