Hefty fuel price hike looms in April
Motorists must brace themselves for an increase of well over R1 a litre in petrol and 92c for diesel, says the AA
Motorists must brace themselves for a R1.16/ l rise in the price of petrol and 92c for diesel in April, the AA said on Monday.
The AA was commenting on unaudited mid-month fuel price data released by the Central Energy Fund.
The forecasted hikes are due to rising international oil prices and a dipping rand-dollar exchange rate, combined with the 26c/l increase to the general fuel and road accident fund levies announced by finance minister Tito Mboweni in his February budget speech.
The AA said the forecasted increases were worrying and could have a severe effect on an economy already reeling from a number of negative factors including corruption, overspending on the civil service, and the largest contraction in a century.
With the expected increases factored in, a litre of 95 ULP Inland (currently at R16.32/l) will now cost R17.48/l of which R6.10 will be taxed through the GFL and RAF. This means that at least 35% of the cost of a litre of this petrol will be taxed.
The wholesale price of diesel (currently R14.12/l) will increase to R15.04 of which R5.96 (including increased levies) will be taxed — or at least 40% of the total cost.
The Association says that either the rand or international oil prices will require a sharp reversal if the picture is not to deteriorate further by month-end.
“The rampant upward march of international oil prices has quickened alarmingly in the first weeks of March. The basic fuel price for petrol, for instance, shot up from R6.55 a litre at the February close-out, to R7.40 a litre in the first two weeks of March. Over the same period, the average rand-dollar exchange rate weakened by about 30cs,” noted the AA.
The AA says the government can no longer ignore the knock-on effects of severe fuel price rises.
“The cost is not only direct, but throughout the value chain, and is battering consumers from all sides. It requires urgent review to help ease pressure on consumers who are battling to stay financially afloat,” said the association.
In March, petrol prices rose 65c/l with the wholesale price of diesel climbing 54c/l for high-sulphur diesel and 56c for low-sulphur diesel. It was the third consecutive month of fuel price hikes.
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