The Automobile Association (AA) says it expects a further hefty hike in fuel prices in April with 95 ULP heading into record territory when the Department of Mineral Resources and Energy makes the official adjustment next Wednesday [April 7].
The AA was commenting on unaudited month-end fuel price data released by the Central Energy Fund (CEF).
The additional 27 cents to the General Fuel Levy and Road Accident Fund levies announced by Finance Minister Tito Mboweni in February will come into effect in April and will add extra costs to every litre of fuel purchased, in addition to the increased monthly adjustment.
According to the latest data by the Association, petrol will increase by a massive increase of 73 cents a litre, with a hike of 39 cents per litre for diesel and a 37 cent hike for illuminating paraffin. With the increase to the levies factored in, petrol could 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,” says the AA.
With the increases to the levies, motorists will, from April, be paying R5.96 per litre of fuel to the GFL and RAF levies, or between 35% and 40% to taxes on every litre purchased.
The Association says the recent two-month streak of petroleum price increases topped out in the third week of March and retreated slightly. The Rand had 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,” says the AA.
The Association notes that the increases in fuel prices will 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 concludes.