Unleaded petrol would have increased by 20 cents a litre if the old system had been used to calculate the fuel price.

Unleaded petrol would have increased by 20 cents a litre if the old system had been used to calculate the fuel price.

The South African Petroleum Industry Association (Sapia) explained that the new Basic Fuel Price (BFP) mechanism announced by the president in his State of the Nation Address replaced the outdated IBLC system and favoured consumers. It meant that the different grades of fuel would have different price increases.

“This has had a major favourable effect on the petrol price increase, which would have been, depending on the grade, about 20c/l more if it had been calculated on the old IBLC basis. The diesel and paraffin price increases would have been about two to three c/l more. The new approach allows for the price of different grades of petrol to be adjusted by different amounts when this is necessary to more closely reflect world market trends.

“The monthly price change is largely driven by two key variables - the rand-dollar exchange rate and international oil prices. As long as these remain volatile, motorists will continue to see significant monthly fluctuations in fuel prices,” said Sapia.

The new pricing structure actually could have resulted in a decline in April, but other factors saw it go up. "Were it not for increases in tax, which vary between 3 and 9c/l by grade of petrol, and the 3c/l increase in the Road Accident Fund Levy, the price of all grades of petrol would have declined in April," said Sapia director Colin McClelland.

"The period covered by the April adjustment reflected major price movements on global markets as diplomatic offensives in the Gulf were superseded by military offences," said McClelland.

"Initially, a trend toward lower international oil prices became evident in the first few days after hostilities began. This occurred very late in the period and will not be fully reflected until May 7 when the next monthly adjustment is made."

All daily price movements between now and April 25 - both up and down -will play a determining role in the exact amount of next month's change, said McClelland.

Expected fuel increases per litre as from April 2:

Petrol (97 Octane Leaded) 5c in retail price

Petrol (97 Octane Unleaded) 4c in retail price

Petrol (95 Unleaded) 6c in retail price

Petrol (93 Octane Leaded) 3c in retail price

Petrol (93 Octane Unleaded) 3c in retail price

Diesel 0,3 per cent sulphur 20c in wholesale price

Diesel 0,05 per cent sulphur 24c in wholesale price

Illuminating Paraffin 8c in wholesale price.

Original article from Car