In a statement released by Automobile Association of South Africa, fuel prices have reached a record-breaking increase over the last three years, despite the government not increasing the General Fuel Levy or Road Accident Fund levy (RAF).
While commenting on the unaudited data from the Central Energy Fund (CEF), Automobile Association (AA) said that in May 2022, inland unleaded 93 petrol cost R21.51 per litre, however, it increased to R23.01 in May 2023.
According to current data from the CEF this price will again increase by 37c per litre in May pushing the price close to R25.15 litre. The unleaded 95 outlook inland is not better with the CEF data indicating an increase of 38 cents per litre. This will drive the price of fuel to approximately R25.50 per litre, which is higher than the R25.42 that was seen in August 2022. However, it is not quite the July 2022 record price of R26.74. Amidst the bad news, the price of diesel is set to decrease by 35 cents per litre while paraffin is also set to drop by 28 cents per litre.
The AA noted, “The decrease to diesel prices is especially welcome as it will not result in higher input costs across various sectors, and this won’t be a driving factor in consumer prices increasing.”
A data review showed that the eager increases in this cycle are a result of the rise and fall in international product prices that went up drastically at the start of the month. The relative stability of the Rand against the US Dollar in early parts of the month contribute only a small margin to the expected increases.
“However, with tensions ramping up in the Middle East, the local currency could be under significant pressure going into the last two weeks of April and could have a more significant impact on local fuel prices in May. At this stage it’s important to keep an eye on that indicator as we head into the new month,” said the AA.
The AA concluded by stating that the expected increase confirms its belief that a fuel price structure review needs to be established if any parts in the current pricing model can be reassessed by the Department of Mineral Resources and Energy to reduce rising costs.
