Fuel prices surge again

Rethabile Mohono

MASERU – Local drivers are grappling with an additional financial burden as fuel prices have experienced a recent spike. The Petroleum Fund reports a significant increase in fuel expenses, following last month’s hike. Effective Wednesday, March 6, adjustments have been made to the prices of petroleum products. Petrol93 has risen by M2.45, reaching a new price of M22.25 per litre. Petrol 95 has also seen an increase of M2.45 per litre, resulting in a price of M22.70 per litre. Additionally, Diesel50 has witnessed an uptick of M1.80 per litre, bringing the price to M23.35 per litre. The price of illuminated paraffin has gone up by M1.10 per litre, reaching a new price of M17.60 per litre.

Similarly, on February 7, there were adjustments in the prices of petroleum products. Petrol93 rose by M0.75 per litre, setting a new price of M19.80 per litre. Petrol 95 experienced an increase of M0.85 per litre, bringing the price to M20.25 per litre. Diesel50 saw a decrease of M0.35 per litre, resulting in a price of M21.55 per litre. Meanwhile, the price of illuminated paraffin remained unchanged at M16.50 per litre.

In September and October, there were substantial increases in the prices of diesel, petrol, paraffin, and liquid petroleum gas, further squeezing an already burdened consumer base. The surge was fueled by international crude oil prices and the weakening of the dollar against the US dollar. The changes in petrol prices in South Africa are attributed to the weakness of the rand against the dollar, according to statements from the Department of Mineral Resources and the Department of Energy (DMRE).

The DMRE also highlighted that recent price hikes in petrol, diesel, and illuminating paraffin were influenced by international fuel prices and reduced shipments of crude oil from Russia’s Urals. Given South Africa’s heavy dependence on fuel imports, these factors directly impact the country’s fuel prices. In August, heightened demand for crude oil from India and China, coupled with a decreased supply from the producer Saudi Arabia, led to price hikes for that month. Notably, the last time petrol prices experienced a decrease was in July 2023.

Conversely, the Petroleum Fund communicated in previous months that costs are determined by various factors. These include transportation, the costs of petroleum products at distribution centres, and associated duty charges. The Fund further explained that the September fuel price increase was attributed to several factors, including a slight rise in crude oil prices during the review period. The average price for August 2023 was $85.1 per barrel, reflecting a 6.8% increase from the $79.70 experienced in July 2023.

This increase is a result of the tightening supply of crude oil due to production cuts made by Saudi Arabia. Furthermore, the fund has indicated that the current surge in diesel and paraffin prices can be attributed to a decrease in the shipment of Russia’s crude oil, particularly the Urals blend, renowned for its high middle distillate content. Additionally, there has been a notable increase in demand for middle distillates in anticipation of the winter season in the Northern Hemisphere.

Despite these challenges, the Petroleum Fund has strongly advised retailers to adhere to the officially gazetted prices, emphasising that charging prices different from those specified is illegal. The Fund stated: “This appeal is based on past observations where some retailers have persistently charged prices exceeding those published. Any retailer found to be contravening these newly set prices will be prosecuted accordingly.”

Meanwhile, South Africa (SA) is also grappling with rising fuel prices. The Department of Energy has confirmed that prices for petrol, diesel, and other fuels in South Africa have in March. These new prices came into effect on Wednesday, March 6. Over the past month, the average Brent crude oil price has increased from $82.03 to $82.50, influenced by ongoing OPEC+ oil production cuts. Production disruptions due to cold weather in North America and heightened tensions in the Red Sea have further impacted shipping costs.