Motorists to reel under massive fuel hike

Fuel prices in May will increase by around 49 cents a litre as of 2 May, and not 92 cents as earlier predicted by the Automobile Association (AA). The error occurred due to an earlier closing off of the reporting period for fuel increases by the Department of Energy.

The Automobile Association (AA) commented earlier on unaudited month-end fuel price data released by the Central Energy Fund (CEF), based on the figures provided up to yesterday (25 April). According to these figures, the under-recovery (and therefore the predicted increase at the pumps) of the fuel price was 92 cents a litre.

However, the Department of Energy has based its new fuel price for May on the figures of Tuesday (24 April), which indicate an increase of 49 cents a litre for petrol, 60 cents for diesel, and 52 cents for illuminating paraffin.

An increase of 49 cents a litre for petrol, 60 cents for diesel, and 52 cents for illuminating paraffin.

Based on these figures, a litre of 93 octane unleaded petrol (inland) – which currently costs R14.23 a litre – will now cost R14.72. This is 23 cents higher than the previous record high of R14.49 in December last year.

“Even with the revised data, these increases are significant and are attributable to a weakening Rand against the US dollar, and increasing international petroleum prices. We remain concerned about the increases, especially those to illuminating paraffin. Users of this fuel will be hit particularly hard as we head into the colder months where many households use this fuel for lighting, heating and cooking,” says the AA.

It should be noted – says the AA – that despite this earlier closing off of the reporting period, the depreciation of the Rand the past few days will impact on future fuel prices.

Going into May, there is already an under-recover of 46 cents a litre. If the Rand doesn’t appreciate significantly against the US dollar, and if international prices don’t decrease, this will mean another increase into June.

The revised predicted price increases must also be seen against the backdrop of the substantial increases to fuel prices in April, which saw the addition of 52 cents a litre being added for the general fuel and Road Accident Fund levies.