According to August inflation figures, petrol prices had already risen by 22 percent over the past year

Petrol prices are all set to be reduced by R1.78 per liter starting Wednesday, Gwede Mantashe, minister of mineral resources and energy, announced on Monday.

The minister shared that both grades of petrol — 93 and 95 ULP & LRP — will be covered by the price reduction. As for the price of diesel, it will be lowered by R185.08 per liter.

The Illuminating Paraffin wholesale price will decrease by 97 cents per liter, while the Single Maximum National Retail Price (SMNRP) for illuminating Paraffin will be reduced by R1.30 per liter. However, the Maximum retail price for LP Gas will be increased by R1.49 per kilogram.

These changes in fuel prices were caused by movements in crude oil prices, the rand-U.S. dollar exchange rate and the implementation of the Slate Levy.

"The average international product prices of petrol, diesel, illuminating paraffin followed the decreasing trend of crude oil while LPGas increased due to higher prices of propane and butane during the period under review," the minister said, SA News reported.

Mantashe added, "These led to lower contributions to the Basic Fuel Prices of petrol, diesel and illuminating paraffin by 207.06 c/l, 115.15 c/l, and 105.18 c/l, respectively."

The Department of Mineral Resources and Energy (DMRE) noted that the average Brent crude oil price decreased due to the rise in global crude oil inventories. This happened due to non-OPEC+ producers increasing their output and the United States lifting sanctions on Venezuela.

It is worth noting that the supply of oil has been affected by the ongoing Israel and Hamas war. Considering the exchange rate of the rand and the U.S. dollar, the department pointed out that the rand has slightly depreciated against the U.S. dollar.

"This led to higher contributions to the Basic Fuel Prices of petrol, diesel and illuminating paraffin by 6.34 c/l, 7.57 c/l, and 7.61 c/l, respectively," it added. "Therefore, the slate levy will increase by 21.92 cents per liter to 52.62 cents a liter. This will be implemented in the price structure of petrol and diesel with effect from 1 November 2023."

This announcement came two months after the department revealed a hike in petrol and diesel prices in August. At that time, the petrol price increased by 37 cents per liter while the diesel (0.05% sulfur) increased by 72 cents per liter.

The department explained the reason behind this increase, noting that the average Brent Crude oil price increased from $75.10 to $79.75.