The price of petrol (95 ULP, in particular) looks poised to hit a record high thanks to anticipated fuel-price hikes in the first week of April 2021.
Commenting on unaudited month-end fuel price data released by the Central Energy Fund, the Automobile Association said the expected “further hefty hike in fuel prices” would see 95 ULP “heading into record territory”.
The additional 27 cents to the General Fuel Levy (GFL) and Road Accident Fund (RAF) levies announced by finance minister Tito Mboweni in February would come into effect in April, adding extra costs to every litre of fuel purchased, in addition to the increased monthly adjustment, the AA said.
According to the latest data, petrol was set for a “massive increase” of 73 cents a litre, diesel an increase of 39 cents and illuminating paraffin an increase of 37 cents. With the raised levies factored in, the petrol price could thus rise by as much as R1 a litre, and diesel by 66 cents a litre (the levies are not added to the cost of illuminating paraffin).
“This means that the fuel price for April will be in the region of R17,32 a litre for ULP 95 inland, comfortably surpassing the previous high of R17,08 set in late 2018,” the AA pointed out.
With the increases to the levies, motorists would from April pay R5,96 per litre of fuel to the GFL and RAF levies, or between 35 percent and 40 percent to taxes on every litre purchased, according to the AA.
The Association said the recent two-month streak of petroleum price increases topped out in the third week of March and retreated slightly. The rand had followed a similar trajectory.
“The unfortunate reality is that the expected hikes will still be substantial. The minor relief of the pullback in petroleum and the exchange rate will be cold comfort to South Africans reeling from the ongoing economic damage being inflicted as a result of COVID-19, and a decade of economic decline,” said the AA.
The Association noted the increases to the fuel prices would have “widespread negative consequences for everyone in the country, not just for motorists”.
“We can only stress again the severe additional damage these increases will do to household budgets, both directly and indirectly as the increased transport costs ripple throughout the value chain. Increased public transport fares will surely also not be far off either,” the Association concluded.
