Crude oil prices
Since the start of the current fuel price review period, 30 August to 26 September, 2013, Brent crude oil prices decreased by U$1/bbl from U$111/bbl to U$110/bbl on average. The big news affecting the oil price and, hence, international product prices over the past month was the threatened military strike on Syria which pushed Brent oil price to a 6-month high on 29 August.
This risk dissipated over the course of September and the oil price has fallen. The spectre of world economic growth has become the focus again. The Brent oil price spiked to US$118,86/barrel on 30 August and ended at US$112,17/barrel on 23 September.
International petroleum product prices
This is the ‘shoulder period’ between the typical peak Northern Hemisphere demand period (led by gasoline consumption in the US) and the peak winter demand period (led by heating oil), so it is normal that product prices and refining margins should wane at this time of year. Gasoline demand in the US has subsided, and thus the opportunity to export gasoline to the US from Europe has been reduced, so even with refinery maintenance shutdowns expected the European market is well supplied.
This means that more is available to export to African markets, including SA, which, in turn, means lower prices for petrol. The US had a surplus of diesel to export to Europe and Latin America, so this is also weighing on outright prices of middle distillate products, including diesel and kerosene. Diesel spreads remain steady above $15/bl in Europe, so prices have fallen in outright terms but not relative to crude.
Rand/US$ exchange rate
The average rand/US$ exchange decreased from US$/R10,09 to US$/R10,01 during the current fuel price review period. The rand strengthened slightly against the US$ after the US central bank said it would continue injecting $85 billion/month into the financial system through bond purchases, a key source of flows into high-yielding emerging markets such as South Africa.
The combination of the fall in the crude oil price and the international petroleum product prices and an appreciation of the rand/US$ exchange rate has seen a reversal of the under-recovery trends of petrol, diesel and illuminating paraffin.
Salary increase for forecourt staff
On 27 September, the minister of energy approved a 4,9c/l retail margin increase on all grades of petrol with effect from 2 October, to accommodate the salary increase for forecourt attendants.
Self-adjusting Slate Levy Mechanism rules
In line with the Self-Adjusting Slate Levy Mechanism, the Slate Levy on petrol and diesel will remain unchanged in October.
Prices
The fuel price decreases effective from 2 October 2013 are as follows:
- Petrol (95 ULP and LRP): 20c/l decrease
- Petrol (93 ULP and LRP): 19c/l decrease
- Diesel (both grades): 2c/l decrease
- IP wholesale: 4c/l decrease
- SMNRP for IP: 5c/l decrease
- Maximum LPGas: 40c/kg decrease.
