How Do Petrol Price Increases Affect LPG Gas Prices?

With fuel prices reaching all-time highs, South Africans are already feeling the effects when they fill up. Higher petrol prices, however, are a drag on the economy in more ways than citizens having less money to spend. The growing cost of fuel, particularly diesel, affects everything moved by truck, rail, or ship as well.

Energy costs are a key contribution to the decades-long inflationary numbers. But have you stopped to think about what the impact on your LPG gas prices might be?

Latest Petrol Price Updates

In the latest review period, petroleum products experienced the following price fluctuations:

  • Petrol 93 octane ULP and LRP will cost R2.37 while Petrol 95 octane sets to rise by R2.57.
  • Diesel containing 0.05 % sulphur will cost R2.31 more per litre.
  • Diesel with 0.005% sulphur will cost R2.30 more per litre.
  • The wholesale price of illuminating paraffin will rise by R1.66 per litre.
  • Illuminating paraffin Single Maximum National Retail Price will subsequently rise by R2.21.
  • The maximum retail price of LP gas, however, will fall by R2.18 per kilogramme.

What Affects The Price Of Petroleum Products?

Prices of petroleum products are rising because of a reduction in global refining capacity. As a result, the average Brent Crude oil price rose marginally from $115 to $115.77 in the last review period, which caused petrol, diesel, and illuminating paraffin prices to increase on a global average scale. 

In the same period, the rand strengthened against the US Dollar, from 15.95 to 15.76 rand per dollar on average, which caused a marginal level of stability.

Gas prices, however, have seen a notable alleviation due to Low Northern Hemisphere seasonal demand resulting in lower gas prices.

What Affects The Price Of LPG Gas?

Like other petroleum products, the price of liquefied petroleum gas (LPG) is heavily affected by international factors. When the demand in the northern hemisphere increases, we are likely to see a price increase in the price of LPG as well.

Since gas is generally a byproduct of crude oil extraction, it seems logical that the two commodities would have a positive link. Even though crude oil and natural gas have certain similarities, their markets are vastly different and susceptible to a wide range of fundamental factors. 

The Maximum Refinery Gate Price On LPG

There is a maximum price at which LPG may be supplied to residential consumers in any location. This is referred to as “maximum refinery gate price” The refinery gate price of liquefied petroleum gas is calculated in accordance with Regulation No. R. 377 of 1 April 2008.

The government regulates the price of LPG monthly using a formula influenced by:

  • Rand/dollar exchange rate.
  • The maximum refinery gate price as established by the Saudi contract pricing.
  • The average monthly Basic Fuels Price (BFP) of 93 octane Lead Replacement Petrol (LRP).

Retail Pricing On LPG Gas

The local refinery capacity in South Africa has no impact on the final LPG price, and retailers can choose to sell gas and gas cylinders at any point lower than the maximum refinery gate price. Final distribution costs are determined at a Wholesale margin and retail margin. These prices factor in:

  • Primary transport costs 
  • Operating expenses
  • Working capital
  • Depreciation

Learn more here.

Save Time & Money With GoGas

Although we are seeing an alleviation in the price of LPG gas at the moment, all countries are subject to LPG price fluctuations. With petrol prices on the rise, South Africans need to save money where and when they can. 

With GoGas, you save money no matter what. When you order gas from us, we offer a R200 discount per steel cylinder trade-in. When you refill your LPG gas cylinder, we will discount the gas that’s still left in your cylinder. And with our seamless online ordering structure, you benefit from free delivery to your door!

GoGas is the new approach to streamlining LPG gas service delivery in South Africa. Find out more and order online today. 

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