Current unaudited data from the Central Energy Fund
(CEF) is pointing to massive fuel price increases across the board for June.
The Automobile Association (AA) says consumers could face further pressure
because government’s earlier relief of reducing the General Fuel Levy (GFL)
ends in May, which, when returned to the GFL, will result in price shocks never
seen before.
“In late March government reduced the GFL by R1.50 for
April and May which brought temporary relief to consumers. The big question now
is how government plans to deal with rising fuel costs from June onwards,
especially given that baseline prices are forecast to move significantly
upwards in June. Based on current, unaudited data from the CEF petrol is
expected to increase by between R1.93 and R1.97 a litre, diesel is expected to
increase by between R1.60 and R1.62 a litre, and illuminating paraffin is
expected to climb by a whopping R2.14 a litre,” notes the AA.
The Association says it must be noted that these price
increases reflect data from the middle of the month, and that the final data
may vary between now and when the adjustment is finally made.
“The two main factors which influence local fuel
prices are the R/US dollar exchange rate and international oil prices. The Rand
is currently trading weaker against the dollar and oil prices are also still
high. Given this, the outlook for June’s fuel prices does not look positive,”
says the AA.
The AA says while the outlook locally is negative it
must be noted that similar trends are being seen throughout the world and that
rising fuel costs are also contributing substantially to the cost of living in
other countries.
The Association says while government’s relief on the
GFL was welcome, a longer-term solution is needed. It says when government
announced the relief in March, it also noted other measures proposed by the
Minister of Mineral Resources and Energy (DMRE) to be introduced after the
expiry of the temporary measures.
“We are rapidly nearing the end of May and the fuel
outlook is looking bleak. Government needs to address this issue sooner rather
than later; consumers are anxious about what lies ahead, and government should
allay these concerns by indicating as early as possible what steps it will be
taking to mitigate against rising fuel costs,” concludes the AA.
