SOUTH AFRICA: FUEL PRICE SPIRAL TAKES A

UNCLAS PRETORIA 002278 SIPDIS STATE PLEASE PASS USGS USDOC FOR 4510/ITA/MAC/AME/OA/DIEMOND DOE FOR THOMAS SPERL E.O. 12958: N/A TAGS: EPET ENRG ECON EIND SF SUBJECT: SOUTH AFRICA: FUEL PRICE SPIRAL TAKES A BREATHER REF: PRETORIA 2998 Summary -------------- ¶1. (U) On June 1, 2005, the Department of Minerals and Energy slightly reduced the prices of gasoline, diesel, and kerosene from all time highs charged the previous month. The primary reason for the move was the lower price of crude oil. End Summary. Government Announces Marginal Price Decreases -------------- ¶2. (U) On June 1, the Department of Minerals and Energy (DME) reduced the retail price of gasoline by 3.1% and wholesale prices of diesel and kerosene by an average of 3.3% and 6%, respectively. The primary reason for the move was the lower price of imported crude oil during the May 1 to May 31 period of assessment. The weakening of the rand towards the end of May and a surcharge to balance refinery losses incurred during the previous month lessened the decrease somewhat as prices moved from all time highs in May. The tables below show the decrease in the average price of fuel in Johannesburg and components for the new price. Wholesale Johannesburg Prices (U.S. Dollars/Gallon) April May June %Change Gasoline - (retail) 3.14 3.20 3.05 -4.7 Diesel - 0.3% Sulfur 2.97 2.96 2.82 -3.9 Diesel - 0.05% Sulfur 3.09 3.10 2.95 -4.8 Kerosene 2.28 2.39 2.23 -6.7 Wholesale Johannesburg Prices (S.A. Rands/Liter) Gasoline - (retail) 5.02 5.22 5.06 -3.1 Diesel - 0.3% Sulfur 4.74 4.84 4.68 -3.3 Diesel - 0.05% Sulfur 4.93 5.06 4.89 -3.4 Kerosene 3.64 3.90 3.71 -4.9 Components for the New Price Basic Fuel Price 48.0% Taxes and Levies 31.9% Operating Margin 20.1% FRAZER