NOTE TO EDITORS:
The Automobile Association (AA) does not regulate or adjust fuel prices in South Africa, nor does it have any input in how the fuel prices are calculated.
Fuel prices are officially calculated and adjusted on the first Wednesday of every month by the Department of Mineral Resources and Energy. The DMRE is the only entity which regulates, sets, and adjusts fuel prices in South Africa.
As a public service to consumers, the AA publishes two fuel price outlooks monthly – one mid-month, and one at the end of the month before the official announcement by the DMRE is made, usually two or three days before the first Wednesday of the new month.
The AA publishes these forecasts to alert the public of looming changes to fuel prices, and the reasons for the changes. The AA relies on publicly available fuel price data from the Central Energy Fund (CEF) to compile its forecasts – a fact which is mentioned in every fuel price outlook issued by the AA. Along with the information relating to fuel price adjustments and providing context for them, the Association often provides useful tips to road users on how to conserve fuel, and tips for saving on fuel expenses.
Easter travel budgets hit hard
The Automobile Association (AA) says it expects a further hefty hike in fuel prices in April with 95 ULP heading into record territory when the Department of Mineral Resources and Energy makes the official adjustment next Wednesday. The AA was commenting on unaudited month-end fuel price data released by the Central Energy Fund.
The additional 27 cents to the General Fuel Levy and Road Accident Fund levies announced by Finance Minister Tito Mboweni in February come into effect in April and will add extra costs to every litre of fuel purchased, in addition to the increased monthly adjustment.
According to the latest data, petrol is set for a massive increase of 73 cents a litre, diesel an increase of 39 cents, and illuminating paraffin and increase of 37 cents. With the increase to the levies factored in, petrol could rise by as much as R1 a litre, and diesel by 66 cents a litre. The levies are not added to the cost of illuminating paraffin.
“This means that the fuel price for April will be in the region of R17.32 a litre for ULP 95 inland, comfortably surpassing the previous high of R17.08 set in late 2018,” says the AA.
With the increases to the levies, motorists will, from April, be paying R5.96 per litre of fuel to the GFL and RAF levies, or between 35% and 40% to taxes on every litre purchased.
The Association says the recent two-month streak of petroleum price increases topped out in the third week of March and retreated slightly. The Rand had a similar trajectory.
“The unfortunate reality is that the expected hikes will still be substantial. The minor relief of the pullback in petroleum and the exchange rate will be cold comfort to South Africans reeling from the ongoing economic damage being inflicted as a result of COVID-19, and a decade of economic decline,” says the AA.
The Association notes that the increases to the fuel prices will have widespread negative consequences for everyone in the country, not just for motorists.
“We can only stress again the severe additional damage these increases will do to household budgets, both directly and indirectly as the increased transport costs ripple throughout the value chain. Increased public transport fares will surely also not be far off either,” the Association concludes.