Consumers to pay more for petrol in December

THE Department of Mineral Resources and Energy (DMRE) has delivered news that no motorist or consumer wanted to hear: a petrol price hike in December.

This comes in spite of the decline in the average Brent crude oil price from $90.79 per barrel to $88.77 a barrel during the period under review, amid fears of lower demand from China due the lockdowns there.

The DMRE yesterday confirmed that motorists will pay more at the pumps as both grades of petrol would go up by 59 cents a litre, higher than the previously expected 20-cent hike.

However, the good news is that diesel is coming down by a significant margin of between R1.52 and R1.59 a litre, while illuminating paraffin would decline by 57 cents per litre.

The DMRE said the higher increase for petrol was due to greater demand by motorists travelling for the Thanksgiving season in the US, amid limited supply due partly to the Russia-Ukraine conflict. This increased demand had resulted in a decrease of gasoline inventories and higher prices as refiners were producing more middle distillates, such as diesel, illuminating paraffin and gas to meet extra winter demand in the northern hemisphere, and consequently producing less petrol.

It said these factors led to higher contributions to the basic fuel price of petrol by 64.87 cents a litre, while a slate levy increase of 13.14 cents a litre will be implemented into the price structures of petrol and diesel, in line with the Self-Adjusting Slate Mechanism rules.

This means that a litre of 95 Unleaded petrol will cost R22.81 at the coast and R23.46 in the inland regions, and 93 Unleaded will retail for R23.16.

This will induce some pain for festive season travellers, as well as consumers looking to spend for Christmas, as goods will also increase to offset the petrol price hikes.

Rising food and fuel prices have been the major driver of headline consumer inflation this year, which peaked at 7.8% in July before softening to 7.6% in October.

Trade union Uasa’s spokesperson, Abigail Moyo, said motorists and commuters would have to pay up as the petrol price increases once again just ahead of the festive season.

Moyo said although petrol remained more expensive than a year ago, the current price of R23.46 was still below the all-time high of R26.74 seen in July.

“Those who will be travelling for holidays would do well to check their spending, as the January back-to-school expenses are around the corner,” Moyo said.

“We urge our members and all commuters to be vigilant, observe and obey the rules of the road over the next few weeks, and into the New Year.”

Meanwhile, Wesbank has cautioned motorists about the real cost of keeping their cars on the road.

Wesbank said that vehicle instalments and fuel spend remained the largest portions of the basket of costs in 2022, accounting for 81% of the monthly spend.

It said fuel spend accounted for 39% of the total, with the vehicle instalment cost at 42%. The figure to November 2022 indicates that the average monthly fuel spend, at R3950, is almost on par with the vehicle instalment rate at R4313.

“Prospective vehicle owners should take a holistic view when planning a car purchase to ensure they don’t overextend themselves by right sizing the spend to fit their budget,” said Lebogang Gaoaketse, WesBank’s marketing and communication head.