South
Africans can expect record fuel price increases in April, delivering yet
another blow to already embattled consumers.
Commenting on mid-month fuel data
released by the Central Energy Fund (CEF), the Automobile Association (AA)
notes that the current data is projecting fuel prices to touch on R24/l for
petrol and R23.60 for diesel.
Based
on the current data, 95 octane petrol is set to increase by R2.15/l, 93 octane
is expected to climb by R2.07/l, diesel by between R2.94/l and R3.08/l and
illuminating paraffin by R2.51/l.
“If
realised at month end, these will be the biggest increases to fuel prices in
South Africa’s history and will, undoubtedly, have major ramifications for all
consumers and the economy in general. We must note, though, that this is the
mid-month outlook, and oil prices are, for the moment, see-sawing significantly
so there may yet be some relief before the official adjustment by the
Department of Mineral Resources and Energy is made going into April,” says the
AA.
The
main driver behind the increases is the movement in international oil prices
which have soared to record levels in recent weeks because of the conflict in
Ukraine and concerns over Russian oil supplies. Russia is the third top
producer of crude oil and supply worries are seen in increased oil prices.
Based
on the current data, the increase to oil prices is contributing 98% to the
predicted price hikes, with the Rand – which stabilised around R15.11 to the US
dollar, contributing the other two percent. Effectively, though, the Rand’s
value against the US dollar is having a nominal impact on the price of fuel
locally.
“We
are seeing record fuel prices around the world as the high oil prices exact
their toll in every market. Locally there is little to cushion the blow for
millions of South Africans who are struggling to cope with a fragile economy
which is hurting their personal financial situation. Consumers should brace
themselves and prepare for what is likely to be a long winter if the conflict
in Ukraine is drawn out,” the AA concludes.
