OUDTSHOORN NEWS - Although national diesel and petrol supplies are sufficient, South Africa's diesel demand remains high as it powers vital sectors such as transport and agriculture.
This was among the key points high-lighted during a media briefing hosted on 25 March by the Fuels Industry Association of South Africa (FIASA), alongside industry leaders and technical experts.
The briefing addressed several critical issues, including the drivers behind the fuel pricing mechanism, the impact of global geopolitical tensions on supply chains, the current status of fuel availability in the country, industry contingency measures, and what consumers should and should not, be concerned about.
Raphi Maake, Director of Fuel Pricing at the Department of Mineral Resources and Energy (DMRE), explained that diesel demand is currently elevated as industries attempt to purchase stock ahead of anticipated price increases.
"There are also instances where prices are already being adjusted, which is not helping. Wholesalers are placing additional orders to mitigate the upcoming price hike," he said.
Maake reassured the media that South Africa remains adequately supplied with fuel.
Xoliswa Macingwane, the head of fuel taxes and regulated prices at the association, outlined the complexity of the fuel pricing structure. She explained that the Basic Fuel Price (BFP) forms the foundation of the pump price and reflects the cost of purchasing crude oil, refining it and transporting it to South Africa.
"The BFP is adjusted monthly and is influenced by global oil prices, the rand/US dollar exchange rate and shipping costs," she said.
She added that a significant portion of the fuel price is made up of taxes and regulated costs. These include the general fuel levy, adjusted annually in April; the Road Accident Fund levy, the carbon fuel levy, and customs and excise duties. Additional costs, such as transportation, secondary storage and retail margins, which cover expenses like salaries, rent, electricity and maintenance, also contribute to the final pump price.
Macingwane further noted that, unlike petrol, diesel prices are not regulated.
"The DMRE publishes a monthly reference price for diesel, but this serves only as a guideline. Wholesalers and retailers are therefore free to set their own prices, which can result in variations between service stations," she explained.
She confirmed that the country's fuel supply remains stable, supported by both local stock and imports from various countries. While global conflicts may cause short-term disruptions, a full-scale shortage is considered unlikely unless there is a significant escalation affecting international supply.
Price impact
Higher fuel prices have a ripple effect across the economy, increasing transport and delivery costs, which in turn can drive up the price of food and other goods. Rising diesel prices may also have a marginal impact on electricity costs, as some generators rely on diesel as a backup energy source.
Local impact
Laubscher Coetzee, the chairperson of Agri Western Cape, said farmers are feeling the pressure as they try to secure fuel ahead of expected price increases, particularly during the current planting and harvesting season.
In addition to diesel, the cost of agricultural inputs such as compost is also rising in anticipation of higher fuel prices.
Residents have also reported inter-mittent shortages at some service stations, with instances of limited availability of diesel and petrol. Reports of rationing and delayed deliveries have further contributed to public concern, despite assurances that national supply remains stable.
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