Average petrol prices could rise to more than R15 per litre this year thanks to tax hikes.
Standard Bank expects that average petrol prices will increase by 1.9% in 2018 compared to those of 2017, potentially causing the price of petrol to increase to more than R15 by the end of the year.
The increase in fuel levies, which came into effect in April 2018, as well as the slight depreciation of the rand, halted the run of consecutive fuel price decreases at the start of 2018. This means that South African motorists can expect similar increases to the ones seen in 2017.
Similarly the cost of 95 petrol and diesel increased by 10.7% and 13.6%, respectively, over the same time period.
Petrol increases: A comparison between those of 2017 and 2018:
|FUEL||JANUARY OFFICIAL 2017||JANUARY OFFICIAL 2018||DECEMBER OFFICIAL 2017||APRIL OFFICIAL 2018|
|0.05% Diesel (wholesale)||R11.41||R12.74||R12.96||12.75|
According to sales data from the National Association of Automobile Manufacturers of South Africa (NAAMSA), domestic vehicle sales have increased year-on-year for the first time in 2018.
Higher sales in March could be attributed to the fact that consumers and fleet operators have taken advantage of buying vehicles at a lower cost before the 1 April VAT increased from 14% to 15% kicked in. Increases in value added tax also encouraged buyers to purchase luxury vehicles before the month-end deadline.
According to the estimates of VAF & Fleet Management at Standard Bank, GDP growth is forecast to improve from 1.3% in 2017 to 1.8% in 2018. The main driver of is accelerated spending growth being underpinned by real wage growth. The average inflation rate is expected to decrease from 5.3% in 2017 to 5.0% in 2018. This has been adjusted accordingly following the various tax hikes announced in the Budget Speech.