Fuel crisis: Here is why diesel is more expensive than petrol

Since September, diesel motorists have been forking out way more than their petrol counterparts, but there is a reason for that

Oct 12, 2022 - 16:30
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Fuel crisis: Here is why diesel is more expensive than petrol

While there has fortunately been some reprieve for motorists driving petrol cars, following the recent fuel price decrease, the same cannot be said for those using diesel. Motorists are now forking out between 89 cents and R1,20 cents less per litre for petrol, while diesel costs between 10 and 15 cents more per litre, effective from 5 October 2022.

Since September 2022, diesel has become dramatically more expensive than petrol – for the first time in 14 years. According to Top Auto, the last time the cost of diesel surpassed petrol was in 2008 during the April global financial crisis. At the time, motorists living in coastal areas paid R9,25 cents per litre, while petrol was R8,67.

EXPLAINER: WHY DIESEL COSTS MORE THAN PETROL

According to Peter Morgan, the CEO of the Liquid Fuel Wholesalers Association, the rise in the diesel price is as a result of the demand for it in the global market. Speaking to CapeTalk, Morgan said traders purchase the product from refineries at a flat rate and then sell it into the market.

Meanwhile in Europe, many market participants have been stockpiling diesel to use for home heating, machinery, and emergency supply, particularly as the winter period approaches.

In addition, there are other factors which contribute to the country’s fuel crisis, including the Ukraine-Russia conflict which began in February 2022, when President Vladimir Putin sent in over 200 000 troops into the neighbouring country.

The diesel price hike had even prompted Cape Town bus provider MyCiti to either reduce or suspend some of its routes. MyCiti said the changes to its bus service are an “urgent response” to the growing cost of running the service due to significant increases in the price of diesel. To make matters worse for commuters, there will be a mandatory fare increase on 1 November.

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