Another steep fuel hike
The retail petrol price will increase by about 75c/l next month.
The daily petrol price under-recovery was 74.974c/l on February 21 after reaching 100.661c/l on January 29 compared with an over-recovery of 3.855c/l on the first day of this year.
The change in the daily petrol price in January was largely due to the weakening rand‚ which moved from R8.51 per US dollar on January 1 to R9.06 on January 29‚ while in February the major factor was a rise in international product prices.
The average under-recovery for the period February 1 to February 21 was 84.966c/l of which the higher international product prices accounted for 71.396c/l‚ while the rand exchange rate only accounted for 13.57c/l.
The department of minerals and energy is therefore likely to implement a retail petrol price increase of about 75c/l on March 6‚ provided the daily under-recovery remains near the February 21 level. The wholesale diesel (0.05% Sulphur) price could rise by a more subdued 53c/l.
Last month the petrol price increased by 41c/l.
The increase would bring the price of 95 ULP to R13.02 a litre and 93 ULP and LRP to R12.81 a litre in Gauteng.
Diesel would cost approximately R11.86 a litre.
An under-recovery means the basic petrol price based on the daily product price and exchange rate is more than the basic fuel price used in the calculation of the monthly retail petrol price.
An under-recovery therefore implies the retail petrol price will most probably be increased at the next monthly price adjustment‚ provided the government does not introduce a new levy or raise either the wholesale or retail margin.
The retail petrol price is adjusted monthly on the first Wednesday of the month in accordance with the previous averaging period’s over- or under-recovery.
The current averaging period runs from February 1 to February 28 and a price announcement is due on March 1.