2 January 2009
Product
Petrol 91 ULP: 137.000 cents per litre decrease in retail price
Petrol 93 ULP & LRP: 136.000 cents per litre decrease in retail price
Petrol 95 ULP & LRP: 134.000 cents per litre decrease in retail price
Diesel 0.05 percent Sulphur: 167.950 cents per litre decrease in wholesale
price
Diesel 0.005 percent Sulphur: 165.950 cents per litre decrease in wholesale
price
Illuminating Paraffin (Wholesale): 131.300 cents per litre decrease in
wholesale price
Illuminating Paraffin (SMNRP): 175.000 c/l decrease in the Single Maximum
National Retail price (SMNRP)
Economic factors affecting the unit over/under-recoveries for the period 28
November 2008 to 1 January 2009
During the period under review, the average international product prices of
Petrol, Diesel and Illuminating Paraffin decreased.
The average Rand/US Dollar exchange rate strengthened when compared to the
previous period. The average Rand/US Dollar exchange rate for the period 28
November 2008 to 01 January 2009 was 9.9518 compared to 10.1823 during the
previous period.
Implementation of a self-adjusting slate mechanism (SSLM) and revised
working rules To administer the basic fuel price
The Slate levy on petrol and diesel is utilised to finance the cumulative
under recovery (negative Slate Account) realised on petrol and diesel sales by
the oil industry. Income generated from the Slate levy and unit over recoveries
realised on petrol and diesel since August 2008, completely wiped-out the
negative Cumulative under recovery balance of some R7,000.00 million. At the
end of November 2008, the balance in the Slate Account was positive. The
Minister of Minerals and Energy approved the implementation of a Self-Adjusting
Slate Levy Mechanism (SSLM) with effect from 1 January 2009. Based on this SSLM
the Slate levy on petrol and diesel will be decreased from 44.85 c/l to 0.0 c/l
with effect from 7 January 2008 whereafter the Slate levy will be adjusted in
line with the SSLM Rules.
A copy of the SSLM Rules is attached hereto and can also be obtained from
the Department of Minerals and
Energyâs website: www.dme.gov.za from 7 January 2009.
The Working Rules to administer the Basic Fuels Price (BFP) was revised to
accommodate the following two changes, namely:
(a) the termination of the addition/subtracting of the additional 1.0 c/l to
cater for the status of the Slate Account balance; and
(b) the termination of the diesel (0.2% sulphur) prices quoted by Platts (a
price reporting agency) at the Mediterranean refining centre and the
replacement thereof by diesel (0.1% sulphur) with effect from 1 January
2009.
A copy of the SSLM Rules and the revised Working Rules can be obtained from
the Department of Minerals and Energyâs website: http;//www.dme.gov.za from 7
January 2009.
Implementation of a revised magisterial district zone system
The Department of Minerals and Energy, in consultation with the South African
Petroleum Industry Association (SAPIA) and Transnet, completed a revision of
the Magisterial District Zone (MDZ) System which is used to set transport
tariffs in the regulated fuel price structures. The Minister of Minerals and
Energy has approved the implementation of the Revised MDZ System with effect
from 7 January 2009. The implementation of the Revised MDZ System will bring
about transport tariff increases in the prices of petrol, diesel and
illuminating paraffin in all the fuel pricing zones. The magnitude of these
transport tariff increases will differ between fuel pricing zones and the price
decreases to be effected on 7 January 2009 will therefore be different between
similar petrol octane grades, diesel grades and illuminating paraffin. An
example of 95 Unleaded Petrol price decreases in three different fuel pricing
zones are reflected hereunder:
Fuel price element: Decrease in BFP
Zone 1A (coast): 91.000
Zone 9C (Gauteng): 91:000
Zone 19A (Gordonia): 91.000
Fuel price element: Termination of slate levy
Zone 1A (coast): 44.850
Zone 9C (Gauteng): 44.850
Zone 19A (Gordonia): 44.850
Fuel price element: Increase in zone differential
Zone 1A (coast): -0.500
Zone 9C (Gauteng): -0.900
Zone 19A (Gordonia): -26.100
Fuel price element: Rounding
Zone 1A (coast): -0.350
Zone 9C (Gauteng): -0.950
Zone 19A (Gordonia): 0.250
Net price decrease
Zone 1A (coast): 135.000
Zone 9C (Gauteng): 134.000
Zone 19A (Gordonia): 110.000
The Revised MDZ System and new transport tariffs by zone can be obtained
from the Department of Minerals and
Energyâs website: www.dme.gov.za from 7 January 2009.
Single maximum national retail price for illuminating paraffin (SMNRP)
The Minister of Minerals and Energy has approved the implementation of a Single
Maximum National Retail Price for Illuminating Paraffin with effect from 2
April 2003. The Single Maximum National Retail Price for Illuminating Paraffin
will change on a monthly basis from the first Wednesday of each month and will
also be promulgated in the Government Gazette. The Single Maximum National
Retail Price with effect from 7 January 2009 to 3 February 2009 will be 648,0
c/l compared to 823,0 c/l from 3 December 2008 to 6 January 2009, that is a
decrease of 175,00c/l.
Maximum LPGAS refinery gate price
The maximum refinery gate price will be R 3 739.74 per metric ton (207.55 c/l)
for the period 7 January 2009 to 3
February 2009.
Price adjustment
In terms of the agreed mechanism:
a) Price changes are adjusted in such a manner that the over-or under-recovery
during the prior month will be corrected in the following month; and
b) The unit over- or under-recoveries are rounded up or down to the nearest
full cent so that the effect of rounding contributes to the clearing of the
cumulative balance of the individual products on the slate.
With effect from 3 March 1999 an additional mechanism has been approved by the
Minister of Minerals and Energy, intended to assist in management of cumulative
slate balances and which operates as follows:
Should the cumulative individual slate balances (positive or negative) exceed
R10 million for petrol, R5 million for diesel, or R1 million for illuminating
paraffin, an additional 1.0 cent per litre will be added or subtracted to the
price as determined in (a) and (b) above, depending on the status of the
individual slate balances.
Breakdown of price adjustment
The price adjustments in (1) above are based on the following actual
data:
Average product over/(under)-recovery, measured for the 25 days from 28/11/2008
to 01/01/2009 (cents / litre) as detailed below.
Petrol 95 ULP: 89.705
Diesel 0.05 percent: 122.608
Diesel 0.005 percent: 120.660
Illuminating Paraffin: 138.361
Cumulative positive or negative slate balances end of November 2008
(R-million)
Petrol 95 ULP: 1 575.740
Diesel 0.05 percent: 130.857
Diesel 0.005 percent: 130.857
Illuminating Paraffin: (126.749)
The price adjustments consist of the following elements (c/l):
Average product over/(under)-recovery rounded to the nearest full cent for
price (increase) / decrease
Petrol 95 ULP: 90.000
Diesel 0.05 percent: 123.000
Diesel 0.005 percent: 121.000
Illuminating Paraffin: 138.000
One cent/litre added or subtracted depending on cumulative slate balance in
terms of additional mechanism
Petrol 95 ULP: 1.000
Diesel 0.05 percent: 1.000
Diesel 0.005 percent: 1.000
Illuminating Paraffin: (1.000)
Termination of slate levy
Petrol 95 ULP: 44.850
Diesel 0.05 percent: 44.850
Diesel 0.005 percent: 44.850
Increase in transport cost (Zone9C only)
Petrol 95 ULP: (0.9000)
Diesel 0.05 percent: (0.9000)
Diesel 0.005 percent: (0.9000)
Illuminating Paraffin: (5.700)
Total price (increase)/decrease:
Petrol 95 ULP: 134.000
Diesel 0.05 percent: 167.950
Diesel 0.005 percent: 167.950
Illuminating Paraffin: 131.300
Report of the independent auditors
The report of the independent auditors is available on request.
Analysis of the elements that resulted in the over or under-recoveries
The over or under-recoveries for the period under review were affected by the
factors set out below, which can be quantified as follows:
Movements in external factors
Movement in International Product Prices:
Petrol: 82.870
Diesel 0.05 percent: 112.583
Diesel 0.005 percent: 110.422
Illuminating Paraffin: 128.799
Movement in Exchange Rate
Petrol 95 ULP: 6.834
Diesel 0.05 percent: 10.024
Diesel 0.005 percent: 10.238
Illuminating Paraffin: 9.562
Over/ (under)-recovery for the period 28 November 2008 to 1 January
2009
Petrol: 89.705
Diesel 0.05 percent: 122.608
Diesel 0.005 percent: 120.660
Illuminating Paraffin: 138.361
Enquiries:
Mr B Khumalo
Tel: 012 679 9032
Cell: 082 773 2388
Issued by: Department of Minerals and Energy
2 January 2009
Source: Department of Minerals and Energy (http://www.dme.gov.za/)
