Retail petrol price could rise

12 Jan 2012

The Department of Minerals and Energy (DME) could implement a retail petrol price increase of about 37 cents per litre (c/l) on 1 February, provided the daily under-recovery remains near the 10 January level. The wholesale diesel (0.05% Sulphur) price would rise by around 9c/l.

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If a 37c/l increase were to be implemented then this would push the Gauteng retail petrol price to a record 1,098c/l after it was cut by 5c/l in January. The Gauteng retail petrol in November 2011 was at a record high of 1,077c/l, exceeding the previous record of 1,070c/l set in July 2008.

The record for the wholesale diesel price is 1,143c/l of July 2008 and if a 9c/l rise is implemented, then it would be 1,036.69c/l in February 2012.

The year ago increase for petrol will rise to 22.1% in February from 21.5% in January, 26.2% in December and 29.4% in November. The year ago increase for diesel will ease to 27.3% in February from 31.1% in January, 37.9% in December, and 34.2% in November.

SA's daily unleaded 95 Octane petrol price under-recovery was 43.6c/l on 10 January, while the diesel under-recovery was 20.1c/l.

An under-recovery means that 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.

An under-recovery therefore implies that 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 29 December to 26 January and a price announcement is due on 27 January. The average under-recovery for the period 29 December to 10 January for petrol was 27.4c/l and the over-recovery for diesel was 6.6c/l.

Source: I-Net Bridge

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