Fuel price increase limited to salary adjustment

September 4th, 2018, Published in Articles: EE Publishers, Articles: Energize

Jeff Radebe

The minister of energy, Jeff Radebe, has announced that the fuel prices will remain unchanged for this month except for the 4,9 c/l increase in the retail margin of petrol to cater for the annual salary increase for forecourt attendants, cashiers and other administration staff.

South Africa has witnessed sustained increases in fuel prices for the past few months, which has placed a strain on consumers.

Despite the fact that these increases were caused mainly by international factors, the department has decided to intervene temporarily for this month. This is a once off temporary intervention to provide some relief to motorists and consumers against fuel price hikes, Radebe says.

The increase affects petrol only. The prices of diesel fuel, illuminating paraffin and LPG remain unchanged.  According to Radebe, the 4,9 c/l salary increase is in line with the Motor Industry Bargaining Council’s (MIBCO’s) agreement of 18 November 2016. This annual increase is effective from 5 September 2018. The minister says this money must be ring-fenced for the wages of the forecourt staff.

Table 1: Fuel price increase, September 2018 (DoE).

Product Increase (c/l) New price (inland) New price (coastal)
Both grades of petrol (93 and 95) 5 R15,86/l R16,08/l R15,28/l R15,49/l
Both grades of diesel 0,05% and 0,005% sulfur 0 R14,40/l R13,92/l
Illuminating paraffin (Wholesale) 0    R9,53/l R8,93/l
Illuminating paraffin (SMNRP) 0
Maximum retail price for LPG 0 R25,76/kg R23,72/kg

 

Table 2: Composition of the maximum retail price of liquid petroleum gas (LPG), September 2018 (DoE).

Price element Coastal region (c/kg) Inland region (c/kg) 
Maximum refinery gate price 974,82 974,82
Primary transport cost 41,148 195,056
Operating expenses 404,949 404,949
Working capital 30,695 30,695
Depreciation 150,149 150,149
Gross margin (cylinder-filling plant) 191,857 191,857
Sub-total 1 1793,618 1947,526
Retail margin (15% of sub-total) 269,043 292,129
Sub-total 2 2062,661 2239,655
VAT (15% of sub-total 2) 309,399 335,948
Maximum retail price 2372,000 2576,000

 

Table 3: Composition of the retail of petrol and the wholesale price of diesel in Gauteng (DoE).

Price element Petrol 95 ULP (c/l) Petrol 93 ULP and LRP (c/l Diesel  0,05% (c/l Diesel  0,005%  (c/l
Wholesale margin  34,000  34,000  67,660  67,660
Secondary storage  18,600  18,600  18,600  18,600
Secondary distribution  15,900  15,900  15,900  15,900
Router differential  0,000  0,000  0,000  0,000
Retail margin  192,100  192,100  0,000  0,000
Zone differential in Gauteng  51,700  51,700  51,700  51,700
IP tracer levy  0,000  0,000  0,010  0,010
Fuel levy  337,000  337,000  322,000  322,000
Customs & excise duty  4,000  4,000  4,000  4,000
RAF levy  193,000  193,000  193,000  193,000
Petroleum Products levy  0,330  0,330  0,330  0,330
Slate levy  0,000  0,000  0,000  0,000
DSML  10,000  0,000  0,000  0,000
Equalisation fund levy  0,000  0,000  0,000  0,000
Pump Rounding  0,200  0,200  0,000  0,000
Sub-total  856,830  846,830  673,200  673,200
Contribution to the basic fuel price  751,170  739,170  767,630  772,030
Retail price (inland) 1608,00 1586,00
Wholesale price (inland) 1440,830 1445,230

Contact Lerato Ntsoko, Department of Energy, Tel: 012 406-7799, mediadesk@energy.gov.za