Fuel price reduction disappoints

The price of fuel has dropped, but not as much as motorists were hoping. The reduction is smaller then that announced last week by the minerals and energy department and follows a review of the existing fuel zones.

Last week, the department said petrol, diesel and paraffin would decrease by between 131c/l and 175c/l, but yesterday it said the retail price of petrol would decrease 134c/l to 137c/l, depending on the grade.

The new estimates will come as a disappointment to millions of motorists and consumers who have factored in last night's decrease.

The South African Petroleum Industry Association (Sapia), the industry body representing the country's biggest petroleum companies, yesterday said there would be “significant” changes to the zone differentials, resulting in the actual price decreases at the pump being different to the decreases announced by the department on Friday.

The department said zone differentials were the cents per litre amounts that reflected the cost of moving fuels from the coast to inland distribution centres by pipeline, rail and road.

Sapia executive director Avhapfani Tshifularo said on Monday, that, “These changes differ by zone and dealers and customers will need to confirm the correct price against the price schedule expected to be published in the Government Gazette.

“Queries in this regard should be directed to the supplying wholesalers who will be able to provide the correct zone price.”

Department spokesman Bheki Khumalo said on Monday that the schedule would be on the minerals and energy department's website.

After the changes, Khumalo said, SA would be divided into three zones: coastal, inland and Gordonia in Northern Cape.

He said the department made the decision after discussions with transport utility Transnet and Sapia. He said rising fuel transport costs prompted the move.

Engen spokeswoman Tania Landsberg yesterday said the magisterial district zone system was used to recover primary bridging costs in the price build up of petrol, diesel and illuminating paraffin.

“The (magisterial district zone) system is no longer fully reflective of primary bridging in SA, both in regard to costs and the actual mode of transport utilised. Furthermore, there is a requirement for a mechanism that is transparent, defensible and simple to implement.”

Source: Business Day

Published courtesy of