4 October 2023
By: Vida Booysen
The final price increases for petrol and diesel in October are higher than expected last week. The diesel price has increased by R1,96/litre and petrol will be between R1,08 and R1,14 more expensive.
This increase means 95 octane petrol will cost R25,68/litre in Gauteng and R24,96/litre on the coast from Wednesday, October 4, while the wholesale price of diesel with 0,05% sulphur content in Gauteng will be R25,01/litre, the highest so far in 2023. The wholesale price on the coast will be R24,30/litre.
Kerosene and gas will also be more expensive; they will increase by R2,02/litre and R2,50/kg, respectively.
The Department of Mineral Resources and Energy said in a release on Tuesday that the main reasons for the increases are the higher international crude oil price, which rose from $87,78/barrel to $91,86, the closure of refineries in the US, an international diesel shortage and the weakening of the rand against the dollar.
But another factor has slipped in: the balance fund levy of 30c/litre which is implemented from this month. The balance fund is the account from which the government compensates fuel companies if it costs them more daily to purchase fuel than they are allowed to charge for it. In other words, motorists then pay too little for fuel in that month until the price rises again at the beginning of the following month.
If the fuel price continues to rise in consecutive months, as has happened in recent times, the balance fund becomes depleted and must be replenished. Hence the levy that has now been added to the price.
The increase comes at a time when farmers in the summer grain areas are preparing to plant, while winter grains will soon be harvested.
There is not much farmers can do to reduce fuel input costs in the production process, except to farm more efficiently and employ new technology, says Prof Johan Willemse, agricultural economist and columnist.
“The newer-generation tractors are much more fuel-efficient than the old ones. Many farmers have replaced their machinery to save money on fuel. Others practise no-till or minimum tillage to use less fuel.”
