Dear Valued Customers,
We are pleased to share exciting news as we approach July—a significant drop in petrol and diesel prices is anticipated. Economists and industry experts attribute this positive outlook to favourable international oil prices and a robust rand.
According to Eleanor Mavimbela, spokesperson for the Automobile Association (AA), early data from the Central Energy Fund (CEF) indicates reductions across all fuel types. Preliminary figures suggest decreases of approximately R1.10c/litre for ULP95, R1.15c/litre for ULP93, 55c/litre for diesel, and around 45c/litre for illuminating paraffin.
“While these reductions won’t return fuel prices to the lows seen earlier this year, they are significant and will provide much-needed relief to consumers,” Mavimbela affirmed.
The positive outlook is supported by a combination of factors, including sustained lower international oil prices and a strengthening rand. Experts predict that if current trends hold, petrol prices could drop by R1.10/litre and diesel by 55c/litre.
At Virgin Fuels, we are committed to offering competitive pricing and top-tier service to support your needs. We look forward to passing on these savings to you, our valued customers, as we continue to navigate these market changes together.
Fuelling South Africa: The Journey of Petrol and Its Hidden Costs
South Africa’s reliance on imported fuels is crucial for meeting local demand and managing price increases. According to the Observatory of Economic Complexity (OEC), South Africa imported crude petroleum worth US$4.34 billion in 2022, approximately R71.05 billion at the average exchange rate of R16.37 per dollar. This makes South Africa the 34th largest fuel importer globally.
Conversely, the country exported only US$108 million (R1.77 billion) of locally produced petroleum in 2022, resulting in a negative petroleum trade balance of US$4.23 billion (R69.25 billion). This discrepancy is partly due to refinery closures in recent years.
The top five countries from which South Africa imported fuel in 2022 were:
• Nigeria: R35.36 billion (49.7%)
• Saudi Arabia: R25.21 billion (35.5%)
• Angola: R6.24 billion (8.8%)
• Ghana: R1.77 billion (2.5%)
• Republic of the Congo: R1.77 billion (2.5%)
The Real Cost of Petrol
The Basic Fuel Price (BFP) represents the cost South Africa pays for a litre of fuel, including transportation and insurance. As of June, the BFP ranged from R12.59 to R13.10 per litre, constituting 53-63% of the retail price.
The remaining 36-46% includes secondary storage and distribution, wholesale and dealer margins, and taxes and levies. For June, these additional costs collectively added up to significant amounts, influencing the final prices consumers pay at the pump.
SA’s Future Petroleum Supply: A Strategic Imperative
South Africa faces a critical challenge in securing its future petroleum supply. Rapid urbanisation and economic growth are driving a soaring demand for energy, particularly liquid fuels. In 2022, Sub-Saharan Africa’s oil product demand reached 91.3 million tonnes, and it’s projected to rise by 56% by 2040.
However, South Africa’s refining capacity has halved since 2020, leading to increased reliance on imports.
The decline of local refineries, coupled with regulatory pressures such as Cleaner Fuels Two requirements and carbon taxes, exacerbates the situation.
The SA Petroleum Industry Association highlights the need for government intervention to support refiners and incentivize facility upgrades. Without this support, the country risks losing significant manufacturing capacity and jobs. Strategic investments in refining capacity, along with a balanced approach to clean energy adoption, are essential.
This will help ensure energy security while transitioning to low-carbon solutions for transportation and industrial sectors.
Driving Environmental Sustainability in the Fuel Industry
The fuel industry is embracing innovative sustainability initiatives to address environmental concerns and enhance corporate social responsibility efforts. Here’s how clients can align with eco-friendly practices:
- Biofuel Blends: Incorporating biodiesel and ethanol blends reduces carbon emissions and promotes renewable resources.
- Carbon Offsetting Programs: Investing in projects that reduce greenhouse gas emissions allows clients to offset their carbon footprint.
- Fuel Efficiency Solutions: Implementing advanced engine technologies and fuel additives helps reduce fuel consumption and minimize environmental impact.
- Renewable Energy Investment: Partnering with renewable energy companies to invest in solar, wind, or hydrogen projects diversifies the energy portfolio and supports clean energy transition.
- Sustainable Supply Chains: Adopting eco-certified suppliers and low-carbon transportation methods reduces environmental impact throughout the supply chain.
By embracing these initiatives, clients demonstrate their commitment to environmental sustainability and contribute to a greener future.
Fuel-Smart Finesse: Turbocharged Tips to Trim Tank Tolls!
As South Africans welcome a decline in fuel prices, optimising fuel-saving strategies will always stay crucial. Here are some practical advice to maximise efficiency:
- Regular Vehicle Maintenance: Schedule routine maintenance checks, including spark plugs and oil changes, to reduce fuel consumption by up to 30%.
- Optimal Tyre Pressure: Keep tyres properly inflated to improve fuel economy by up to 20%. Regularly check and adjust tyre pressures as recommended by the manufacturer.
- Wheel Alignment and Tyre Rotation: Ensure wheels are aligned correctly and rotate tyres every 10,000 km to minimize friction and extend tyre life, contributing to overall fuel efficiency.
- Gentle Acceleration: Avoid aggressive driving; accelerate smoothly and maintain steady speeds in the highest suitable gear to conserve fuel.
- Minimise Drag: Remove roof racks and close windows at high speeds to reduce aerodynamic drag, enhancing fuel efficiency.
- Journey Consolidation: Combine multiple short trips into one efficient route to reduce cold starts and overall fuel consumption.
By implementing these strategies, motorists can stretch their fuel budget, enjoy savings, and contribute to a cleaner environment. With fuel prices decreasing, now is the ideal time to embrace these fuel-smart tactics and drive towards a more economical future.
