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Dept of Energy announces record high fuel price hikes for October

Oct 1, 2018
Dept of Energy announces record high fuel price hikes for October

Fuel users will have to tighten their belts after the Department of Energy on Monday announced unprecedented fuel price increases for October 2018.

According to the Department of Energy, Petrol (93 octane) will go up by 99c/l; Petrol (95 octane) by R1.00 and Diesel by R1.24\l while Illuminating paraffin will go up by R1.04/l on Wednesday.

It added that LPGGas will also go up by R179.00 per kilogram as the maximum retail price.

Economic reasons for fuel price increases in October

"The average international product prices of Petrol, Diesel and Illuminating Paraffin increased during the period under review," the Department of Energy explained.

"The Rand depreciated against the US Dollar during the period under review, on average, when compared to the previous period. The average Rand/US Dollar exchange rate for the period 31 August 2018 to 27 September 2018 was 14.7899 compared to 13.9430 during the previous period.

"This led to a higher contribution to the Basic Fuel Prices on petrol, diesel and illuminating paraffin by 48.72c/l, 51.03c/l and 50.62 c/l respectively."

Slate Levy

The Department of Energy said that in line with the Self-Adjusting Slate Levy Mechanism Rules, the Slate levy on petrol and diesel will remain at 0.00 c/l with effect from 03 October 2018.

Read the full statement HERE.

Unprecedented fuel price increases in October

Lasxt week, the Automobile Association of South Africa warned that motorists and other fuel users were facing unprecedented fuel price increases in October.

The AA added that excluding months where fuel taxes were hiked, this will be the largest single fuel price increase South Africa has ever experienced.

"The impact inflicted on the economy by such increases may put pressure on President Ramaphosa's recently-announced stimulus package," the association said.

"We estimate this increase could extract a further R2.5bn a month in transport costs from an economy that is already on the ropes. The cost of doing business will go up and consumer disposable income will shrink.

"We don't believe the economy could grow meaningfully under such conditions."

At the beginning of September, the Minister of Energy, Jeff Radebe, on Monday announced that fuel prices would remain unchanged for the month of September except the 4.9c/l increase in the retail margin of petrol to cater for the annual salary increase for forecourt attendants, cashiers and other administration staff.

This was after months of fuel hikes. At the beginning of August, the Department of Energy announced a slight increase in petrol prices and a drop in diesel prices.

Deputy President, David Mabuza, told Parliamnet in August that government was exploring ways to minimise the impact of high fuel prices.

This followed a similar announcement by Minister Radebe his department was intensifying efforts to cap and bring down the escalating cost of fuel.  

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