South Africa’s fuel prices are set to fall in April, despite the introduction of a 39 cent a litre rise in fuel taxes, according to the Automobile Association.
The AA was commenting on unaudited month-end fuel price data released by the Central Energy Fund.
“International petroleum prices continued to ease during March on the back of increased global oil stocks which have mostly blunted Opec’s recent production restrictions,” the AA said in a statement.
“Over the same period, the rand performed strongly against the dollar, notwithstanding recent events.”
The Association added that, even with the fuel tax hikes, the petrol price was expected to drop by around 24 cents a litre, diesel by nine cents, and illuminating paraffin by ten cents.
“However, the last day’s developments have shown that uncertainty persists around key political figures in the ministry of finance,” the AA added.
“In our view, the Presidency was ill-advised to call off the treasury’s international roadshow at such short notice with so little detail given. The resultant sharp weakening of the rand again demonstrates the importance of political and fiscal stability to investors.”
The AA went on to say that any “further political shocks” that weakened the rand would directly result in increased transport costs, as well as higher domestic costs for those who use paraffin for heating, cooking and lighting.
“Lower-income citizens are disproportionately affected by fuel price hikes arising from rand weakness. The government’s lack of sensitivity towards investor risk appetite is directly contributing to increased hardship for the poor,” the AA concluded.
