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27 December 2007

Product

* Petrol 91 ULP 0.000 No change
* Petrol 93 ULP & LRP 0.000 No change
* Petrol 95 ULP & LRP 0.000 No change
* Diesel 0.05% Sulphur 1.000 cents per litre increase in wholesale price
* Diesel 0.005% Sulphur 0.000 No change
*Illuminating Paraffin (Wholesale) 9.000 cents per litre decrease in wholesale price
* Illuminating Paraffin (SMNRP) 12.000 cents per litre decrease in the Single Maximum National Retail price (SMNRP)

Economic factors affecting the unit over/under-recoveries for the period 30 November 2007 to 26 December 2007

During the period under review, the average international product prices of Petrol, Diesel and Illuminating Paraffin decreased.

The average Rand/US Dollar exchange rate strengthened when compared to the previous period. The average Rand/US Dollar exchange rate for the period 30 November 2007 to 26 December 2007 was 6.8433 compared to 6.7243 during the previous period.

Single Maximum National Retail Price for Illuminating Paraffin (SMNRP)

The Minister of Minerals and Energy has approved the implementation of a Single Maximum National Retail Price for Illuminating Paraffin with effect from 2 April 2003. The Single Maximum National Retail Price for Illuminating Paraffin will change on a monthly basis from the first Wednesday of each month and will also be promulgated in the Government Gazette. The Single Maximum National Retail Price with effect from 2 January 2008 to 5 February 2008 will be 757,0 c/l compared to 769,0 c/l from 5 December 2007 to 1 January 2008, that is a decrease of 12,0 c/l.

Liquid Petroleum Gas (LPGAS)

In terms of the Government Notice No R1 029 dated 31 July 2002 the maximum refinery gate price of LPGAS for the period 1 December 2007 to 31 December 2007 will be R5 784.46 per metric ton (321.03 c/l).

Price Adjustment

In terms of the agreed mechanism:
(a) Price changes are adjusted in such a manner that the over-or under-recovery during the prior month will be corrected in the following month.
(b) The unit over-or under-recoveries are rounded up or down to the nearest full cent so that the effect of rounding contributes to the clearing of the cumulative balance of the individual products on the slate.

With effect from 3 March 1999 an additional mechanism has been approved by the Minister of Minerals and Energy, intended to assist in management of cumulative slate balances and which operates as follows:

Should the cumulative individual slate balances (positive or negative) exceed R10 million for petrol, R5 million for diesel, or R1 million for illuminating paraffin, an additional 1.0 cent per litre will be added or subtracted to the price as determined in (a) and (b) above, depending on the status of the individual slate balances.

Breakdown of price adjustment

The price adjustments in (1) above are based on the following actual data:

- Average product over/(under)-recovery, measured for the 19 days from 30/11/2007 to 26/12/2007 (cents/litre) as detailed below:
* Petrol 95 ULP: 1.395
* Diesel 0.05(%): 0.476
* Diesel 0.005(%): 1.124
* Illuminating Paraffin: 10.670

- Cumulative positive/(negative) slate balances end of November 2007 (R million):
* Petrol 95 ULP: (118.006)
* Diesel 0.05(%): (399.037)
* Diesel 0.005(%): (399.037)
* Illuminating Paraffin: (42.069)

The price adjustments consist of the following elements:

- Average product over/(under)-recovery rounded to the nearest full cent for price (increase)/decrease:
* Petrol 95 ULP c/l: 1.000
* Diesel 0.05(%) c/l: 0.000
* Diesel 0.005(%) c/l: 1.000
* Illuminating Paraffin c/l: 10.000

- One cent/litre added or subtracted depending on cumulative slate balance in terms of additional mechanism:
* Petrol 95 ULP c/l: (1.000)
* Diesel 0.05(%) c/l: (1.000)
* Diesel 0.005(%) c/l: (1.000)
* Illuminating Paraffin c/l: (1.000)

- Total price (increase) / decrease:
* Petrol 95 ULP c/l: 0.000
* Diesel 0.05(%) c/l: (1.000)
* Diesel 0.005(%) c/l: 0.000
* Illuminating Paraffin c/l: 9.000

Report of the independent auditors

The report of the independent auditors is available on request.

Analysis of the elements that resulted in the over/(under)-recoveries

The over/(under)-recoveries for the period under review were affected by the factors set out below, which can be quantified as follows:

Movements in external factors:
- Movement in International Product Prices
* Petrol c/l: 8.998
* Diesel 0.05% c/l: 9.173
* Diesel 0.005% c/l: 9.883
* Illuminating Paraffin c/l: 19.179

- Movement in Exchange Rate
* Petrol c/l: (7.603)
* Diesel 0.05%: (8.697)
* Diesel 0.005%: (8.697)
* Illuminating Paraffin: (8.509)

Over/(under)-recovery for the period 02/11/2007 to 29/11/2007
* Petrol: 1.395
* Diesel 0.05%: 0.476
* Diesel 0.005%: 1.124
* Illuminating Paraffin: 10.670

Enquiries:
Ms B Mafuna
Tel: 012 317 8086
Cell: 082 571 4310

Issued by: Department of Minerals and Energy
27 December 2007
Source: Department of Minerals and Energy (http://www.dme.gov.za)