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
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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