Fuel prices will further rise in February 2017 according to the latest information from the Department of Energy which was published today, says Fanie Brink, an independent agricultural economist. According to this information, the price of gasoline 93 (ULP & LRP) in Gauteng will possible rise on Wednesday, 1 February by 31,3  cents per liter and the price of diesel with a 0.005% sulphur content by 24,0 cents per liter.

The main reasons for these price increases can still largely be attributed to the higher crude oil and international petroleum product prices after the members of the Organization of Petroleum Exporting Countries (OPEC) and the 11 countries that are not members of the organization, on 10 December 2016 finally reached an agreement to reduce their production of crude oil by 1,8 million barrels per day. The agreement came into operation on 1 January 2017 for the next 6 months.

The oil producers confirmed on Sunday after a meeting in Vienna, Austria that the agreement was implemented very well and that the oil countries have already removed 1,5 million barrels a day or more than 80% of their collective target out of the market.

The further rise in the price of Brent crude oil to $ 58 per barrel and the resulting higher international prices of petroleum products this month have so far caused increases of almost 42,1 cents per liter in the local petrol price and 34,6 cents per liter in the diesel price. The strengthening of the R/$-exchange rate over the past month fortunately had a reduction in the local petrol price of 10,8 cents per liter and 10,6 cents per liter in diesel price.

The final fuel price increases will be announced by the Minister of Energy on Friday, 27 January 2017. Source: Department of Energy.

Issued by Independent Agricultural Economist