Mantashe on fuel prices: SA could have a reprieve in July

There could be a reprieve from fuel price hikes in July, Minister
of Mineral Resources and energy Gwede Mantashe has said.

Recent fuel price hikes are due to “local and
international factors” including the carbon tax levy, effective from June
1, 2019, Mantashe said in a statement late on Tuesday.

However, he said, ” Going forward, the expectation is
that barring any negative geopolitical event, the indications are that there
will be a reprieve in Fuel Prices for the month of July.”

Recent hikes had been sparked by a combination of events, he
said.

“A current priority local factor is the newly
implemented Carbon Tax Levy
which was announced by the Minister of Finance on February 2019,”
Mantashe’s office said in a statement, adding that the fuel levy applicable to
petrol and diesel had increased “in line with” the announcement.  

The minister also cited implementation of the self-adjusting
slate levy, which from May 5 would amount to 13.16 cents per litre for petrol
and diesel. At the end of April 2019, the combined cumulative slate balance on
petrol and diesel amounted to minus R1.41bn, Mantashe said.

“On the international front the main reasons for the
increase are the Rand/ Dollar exchange
rate and the Brent Crude Oil price,” Mantashe said. “During
the period under review, the rand depreciated against the US Dollar from R14.14
to R41.41.

“This led to a higher contribution to the basic fuel price
on petrol by 14.32 cents per litre, diesel by 15.01cents per litre, and illuminating
paraffin by 14.92cents per litre.”

The statement added: “The Brent Crude Oil Price, on the
other hand, experienced a slight upward increase from 71.00 US Dollars (USD)
per barrel to 71.60 USD per barrel. The pressure on oil prices has been caused
by the recent escalating tensions between the United States of America and
China.”

Petrol prices increased by 9 cents a litre at midnight,
while diesel jumped by 33 cents a litre.