30 November 2012

South Africa: Fuel Price Decreases to Be Effected On 5 December 2012

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The next fuel price adjustments will be effected on Wednesday, 5 December 2012. The current fuel price review period closed on 29 November 2012. The factors that influenced the fuel price adjustments are outlined below:

1. Crude oil prices

During the current fuel price review period (2 November 2012 to 29 November 2012), the average Brent crude oil price, compared to the previous fuel price review period, remained the same.

2. Lower international product prices

During the current fuel price review period, the international product prices of petrol, diesel and IP, on average, decreased by 38.6 c/l, 37.2 c/l and 29.0 c/l respectively. These decreases mainly emanate from a decrease in the price differentials (also referred to as the gross refining margin) between crude oil and refined petroleum products. The refining margins on petrol and diesel decreased due to major refining maintenance programs currently underway in Europe.

3. The Rand / Dollar exchange rate

The average Rand/ dollar exchange rate deteriorated by almost 14.0 South African cents during the current fuel price review. The deterioration of the Rand against the US Dollar can mainly be attributed to the strengthening of the US Dollar against all major currencies like the Pound and the Yen.

4. Adjustment to the Slate Levy on petrol and diesel

In line with the Self-Adjusting Slate Levy Mechanism Rules, the Slate Levy on petrol and diesel will remain unchanged at 15.36 c/l.

5. Fuel margins adjustments

In line with the Regulatory Accounting System (RAS) Margin Model calculations, the following margin increases will also be implemented into the price structures of petrol, diesel and IP with effect from 5 December 2012, namely:

(a) Retail margin on petrol only: 3.9 c/l;

(b) Wholesale margin on petrol, diesel and IP: 5.5 c/l;

(c) Secondary storage: 2.4 c/l; and

(d) Secondary distribution: 2.1 c/l

In total the fuel margins increased by 13.9 cents per litre.

Please note that Secondary storage and Secondary distribution are reflected as one line item in the price structures of petrol, diesel and IP and referred to as the "Service Differential"

6. Fuel price decreases

Based on the average unit over recovery and implementation of the Regulatory Accounting System (RAS) margins, the following fuel price decreases will be implemented on 5 December 2012, namely:\

Petrol (all grades): 9.0 c/l, decrease;

Diesel (0.05% Sulphur): 5.0 c/l, decrease;

Diesel (0.005% Sulphur): 6.0 c/l, decrease;

IP wholesale: 4.0 c/l, decrease;

SMNRP for IP: 5.0 c/l, decrease; and

Maximum Retail Price for LPGas: 35.0 c/kg, decrease

Issued by: Department of Energy

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