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The Department of Mineral and Petroleum Resources has approved an interim adjustment of all the affected magisterial district zones in Nelson Mandela Bay Municipality, largely due to the “temporary closure of the Port of Port Elizabeth”.
Department spokesperson, Robert Maake, said this would come into effect on 2 October when fuel prices are adjusted.
Earlier, several industry players, including the Liquid Fuel Wholesalers Association of South Africa, approached the Minister for a temporary exemption from price reductions, as fuel had to be trucked in from East London to Nelson Mandela Bay at additional cost.
According to a Daily Maverick report, quoting Peter Morgan, the CEO of the Liquid Fuel Wholesalers Association of South Africa, a fuel tanker being piloted into the harbour during huge swells in June, crashed into a crucial bunker normally used to transfer fuel to tanker trucks for distribution to petrol stations.
He told the publication that with the bunker out of commission, liquid fuels wholesalers had to collect petrol and diesel from the East London harbour at extra cost, including for extra tankers.
The Department of Mineral and Petroleum Resources said on Monday that the cost of bringing fuel from East London to Port Elizabeth is included in the price adjustment.
"All the costs of taking fuel to those zones have changed now because of the closure of the port there. This is a temporary change until the port is fixed. The adjustment to the road transport tariffs applicable to petrol, diesel and IP price structures will range from a decrease of 0.9 c/l in Zone 9A to an increase of 10.5 c/l in Zone 8B," Maake said, adding that the adjustments are applicable on the old tariffs.
According to Transnet it should be fixed within four months or so, and once fixed then we will revert to the old zone," Maake said.
Morgan told Algoa FM News on Monday that this was an industry-wide issue and that they were one of several other organisations to approach the Minister.
He said it is not an issue of pricing for them, but rather about the security of supply.
Morgan said the incident in the port of Port Elizabeth the industry needed a solution as the port of Port Elizabeth, in terms of the magisterial zoning system, is designated as a supply point.
However, he said since the bunker is out of commission, the industry had to incur the additional cost of transporting fuel from East London.
"What we have agreed with the government is that because it (the port of PE) is no longer a supply point, we needed this alternative calculation, and it has to stay in place until Transnet Ports Authority confirms that the port is operational again," Morgan said.
He said the issue affects not only Nelson Mandela Bay but other areas as well, saying fuel suppliers in Gqeberha also supply products to the Free State and Northern Cape.
“It’s about security of supply,” Morgan stressed.
Meanwhile, the Department of Mineral and Petroleum Resources said that the price of all grades of petrol will drop by R1.06 and R1.14 a litre respectively, all grades of diesel will come down by R1.12 and R1.14 cents a litre, and illuminating paraffin will come down by R1.11 c/l.
Maake said the average Brent Crude oil price decreased from 78.54 US Dollars (USD) to 72.82 USD per barrel, during the period under review, while the average international petroleum product prices decreased on average, in line with the lower oil prices, during the period under review.
“The Rand appreciated on average, against the US Dollar (from 18.05 to 17.68 Rand per USD) during the period under review.
“This led to lower contributions to the Basic Fuel Prices of all products by over 21.00 cents per litre,” he said.
Moneyweb reports that this is the lowest fuel price in more than two and a half years, and a sign that the country’s inflation outlook is improving.
