Department of Mineral Resources Announces Decrease In Diesel, Gas, Paraffin Prices

The prices of diesel, gas and paraffin have gone down, according to the Department of Mineral Resources (DMR). However, the price of petrol has increased.

The price of diesel has dipped by 73 cents per liter while the prices of both grades of petrol — 93 and 95 — have gone up by 37 cents per liter, the DMR said, as per Business Tech.

Wholesale illuminating paraffin has had a price increase of 33 cents per liter while the single maximum national retail price of it has decreased by 44 cents per liter.

As for liquefied petroleum (LP) gas, the single maximum national retail price of it has gone down by 44 cents per kilogram.

Apart from sharing the official fuel price adjustments for May, the DMR also explained the reason behind the movements in prices.

"(A) Petrol prices were boosted by the beginning of the driving season in the U.S. and economic growth in China. (B) Middle distillate prices on the other hand decreased due to oversupply in the markets," the DMR said, as reported by SANews.

"These factors led to higher contributions to the Basic Fuel Prices of petrol by 68.03 c/l, and lower contributions to diesel and illuminating paraffin by 45.99 c/l and 21.00 c/l respectively. The LP gas prices are decreasing due to the lower prices of propane and butane during the period under review," the department added.

The DMR also pointed out that there are other factors contributing to the price adjustments such as exchange rate and crude oil prices.

"The average Brent Crude oil price increased from 79.24 U.S. Dollars (USD) to 82.20 USD during the period under review," the department said further.

The department then explained the main contributing factors, noting that the "Chinese GDP growth data, which is driven mainly by household consumption, mainly services; and [the] OPEC+ announcement of a further oil production cut of around 3.66 million barrels per day on 02 April 2023."

DMR shared that its effect will be seen in the upcoming months as the production cuts are implemented.

"The Rand appreciated, although slightly on average, against the U.S. Dollar (from 18.30 to 18.12 Rand per USD) during the period under review when compared to the previous one," the department concluded. "This led to lower contributions to the Basic Fuel Prices of petrol, diesel and illuminating paraffin by 12.25 c/l, 11.98 c/l and 11.62 c/l, respectively."