Consumers and motorists will be hardest hit this month as the price of petroleum will rise to an all-time high of close to R20 per litre due to high Brent crude oil prices and a weaker exchange rate.
CONSUMERS and motorists will be hardest hit this month as the price of petroleum will rise to an all-time high of close to R20 per litre due to high Brent crude oil prices and a weaker exchange rate.
The Central Energy Fund (CEF) on Monday night issued its monthly fuel price adjustment, showing that petrol will go up by an unprecedented R1.21 per litre (Petrol 93 and Petrol 95 UPL and LRP), while diesel will rise by R1.48 per litre from midnight on Wednesday.
This means that petrol will rise from R18.33 per litre to R19.54 per litre, the highest it has ever been.
Fuel prices have climbed by almost R5 since January when the price of petrol was R14.86 per litre inland.
The Department of Mineral Resources and Energy said that the average Brent crude oil price increased from $75.50 (R1,161) to $83.40 per barrel during the period under review, the highest in three years due to rising demand and weak supply from non-Opec and other oil producers.
“The situation was exacerbated by the impact the current gas challenges by European countries are having on the prices of energy commodities,” it said.
The rand also depreciated against the US dollar during the period under review, from R14.56/$1 to R14.72/$1, leading to higher contributions to the Basic Fuel Prices by more than 15c per litre.
The wholesale price of illuminating paraffin will also climb by R1.45 per litre, which will have a huge impact on poor households who rely on this fuel.
Consumers are already dealing with steep electricity prices, high food prices as the headline inflation rose to five percent, and rising transport prices amid declining incomes and massive job losses.
Last month, the AA warned that fuel prices were set for the largest increase in history, saying that this would be “catastrophic” for consumers.
“R20 per litre for patrol is now a realistic scenario before the end of 2021,” it said.
“Brent crude has broken through the $85 per barrel mark and the basket of oil prices used to calculate South Africa’s oil price are following Brent higher.”
– BUSINESS REPORT
