The diesel price will be going up rise by a record R2.84/l on Wednesday, which raised the spectre of a fresh round of inflationary pressures.
The price jump is not the best news for South Africa’s ICT sector since companies such as telecommunications operators, heavily rely on it to power generators to keep base stations and data centres operational during load shedding.
Making the announcement on Monday, the department of mineral resources & energy said 93 and 95 unleaded petrol will increase by R1.71/l. This is the third time that diesel price will be going up this year, with increases of between R2.76 and R2.84/l.
Gwede Mantashe, the mineral resources & energy minister said a big reason for the fuel price adjustments was that the price of Brent crude oil had increased from US$79.75 to $84.78/barrel.
It is also said that another reason for the increase in diesel and paraffin prices, is lower shipments of crude from Russia and rising demand ahead of the winter season in the northern hemisphere.
The rand depreciated on average against the US dollar (from R18.28 to R18.67/$), too, while a 5c/l increase in the price structure of petrol to accommodate a wage increase for forecourt employees was approved.
This increase in the price of diesel will have a huge impact on inflation and businesses trying to stay afloat by using generators to offset load shedding, including power-hungry data centres.