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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.