Current unaudited data from the Central Energy Fund points to huge fuel price increases across the board for June.
The Automobile Association (AA) says consumers could face further pressure because the government’s earlier relief of reducing the general fuel levy ends in May and will result in price shocks never seen before.
“In late March government reduced the general fuel levy by R1.50 for April and May which brought temporary relief to consumers,” the AA said.
“The big question now is how government plans to deal with rising fuel costs from June onwards, especially given that baseline prices are forecast to move significantly upwards in June.
Based on current, unaudited data from the Central Energy Fund petrol is expected to increase by between R1.93 and R1.97 a litre, diesel is expected to increase by between R1.60 and R1.62 a litre, and illuminating paraffin is expected to climb by a whopping R2.14 a litre, the AA said.
These price increases reflect data from the middle of the month, and the final data may vary between now and when the adjustment is made, it said.
“The two main factors which influence local fuel prices are the rand/US dollar exchange rate and international oil prices. The rand is now trading weaker against the dollar and oil prices are also still high. Given this, the outlook for June’s fuel prices does not look positive,” the AA said.
While the outlook locally is negative, the AA said it must be noted that similar trends are being seen throughout the world and that rising fuel costs are contributing substantially to the cost of living in other countries.
While the government’s relief on the general fuel levy was welcome, a longer-term solution is needed, it said. When the government announced the relief in March, it also noted other measures proposed by the minister of mineral resources & energy to be introduced after the expiry of the temporary measures.
“We are rapidly nearing the end of May and the fuel outlook is looking bleak. Government needs to address this issue sooner rather than later; consumers are anxious about what lies ahead, and government should allay these concerns by indicating as early as possible what steps it will be taking to mitigate against rising fuel costs,” the AA said.
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