South Africa’s fuel price crisis is far from over. Here is the likely scenario for May and June:
ALTHOUGH May could bring a slight reprieve for those who fill their cars with petrol, it would appear South Africa’s fuel price crisis is far from over.
The latest data released by the Central Energy Fund on April 22 shows an over-recovery for the petrol price, but a fairly steep under-recovery for diesel. If current price trends persist until the end of the month, the price of petrol could come down by between 20 and 30 cents a litre, while diesel would increase by more than 80 cents.
A sobering thought, though, is that the government’s so-called fuel tax holiday is set to fall away at the end of May and at this stage there is no indication of whether it might be extended. This, in theory, means a R1.50 price increase at the beginning of June, over and above any oil price movements that might also push the price up.
Once the General Fuel Levy “holiday” ends, South Africans will once again be paying R6.11 per litre in levies and taxes every time they fill up. That said, the finance minister has announced various permanent adjustments to the fuel price calculation from June, including a cap on the price of 93 Unleaded petrol. However, it remains to be seen how much relief this will provide to cash-strapped South African motorists and commuters.
“The intervention to cut the GFL is significant as it shows government is taking the issue of rising fuel costs seriously, which is to be welcomed,” the Automobile Assiciation said.
“It also has indicated that it is looking at several proposals to deal with rising fuel costs into the future. Whatever plans government is considering, though, these should be fast-tracked as the trend of increasing fuel prices is likely to continue in the short- to mid-term, especially as the situation in the Ukraine remains unresolved, which is adding pressure to the international petroleum product price, and, in turn, to local prices.
“Our concern, as always, is the impact of all of this on consumers and for that reason a sustainable, long-term solution should be found sooner rather than later,” the AA added.
South Africans are currently paying record prices for fuel, with 95 unleaded petrol costing R21.24 at the coast and R21.96 in the inland regions, where the cheaper 93 grade retails for R21.63.