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Over R23 per litre in April? Early data points to another massive fuel price hike

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Early indications are pointing towards another substantial fuel price increase for April.

File picture: Courtney Africa / Independent Media.

IT IS NO secret that Russia’s invasion of Ukraine has sent international oil prices skyrocketing, and some economists are even predicting that the worst case scenario could be eventual fuel prices in the region of R40 per litre in South Africa.

While it remains to be seen whether fuel prices will ever rise to that level, early indications are pointing towards another substantial fuel price increase for April.

According to early month data released by the Central Energy Fund, the average under-recovery for the current fuel price cycle, so far, is pointing towards an increase in the region of R2.15 for 95 Unleaded petrol and R2.71 for 500ppm diesel.

This data represents an average of the oil price and currency movements that took place between 25 February and 7 March, and the eventual April fuel price will also be determined by what takes place between now and late March. Of course, a lot can change between now and then.

However, the latest daily data paints an even bleaker picture, showing an under recovery of R3.43 for petrol and R5.01 for diesel. This means that unless oil prices soften between now and month-end, South Africa’s fuel price hike will be closer to the R3.00 mark, while diesel will almost certainly surpass that.

Yet even if oil prices do soften and the current prediction of a R2.15 petrol price hike materialises, South Africans living inland will still end up paying R23.75 for 95 Unleaded and R23.50 for 93 ULP, while those at the coast will fork out R23.03 for 95 ULP. Of course, if oil doesn’t subside then it’s likely that Gauteng motorists will be paying over R24 per litre from next month.

March saw a petrol price hike of R1.46 per litre for petrol and up to R1.48 c/l for diesel, and according to the AA these continued increases will have a sharp and immediate effect on the poor, as well as long-term inflation.

“These increases will certainly impact on every single South African given the reliance the country has on fuels for transportation, manufacturing and in the agricultural sector,” the AA said.

One silver lining, however, is that the Minister of Finance did not increase fuel taxes during February’s Budget Speech. However, given the current oil prices, and local taxes that amount to R6.11 per litre, the impact of this reprieve unfortunately won’t be noticeable to most.

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