JOHANNESBURG - South African motorists and commuters will be hit with fuel price hikes in both March and April, with high international oil prices affecting next month’s fuel cost and increased taxes coming into effect the following month.
Commenting on unaudited month-end data from the Central Energy Fund, the Automobile Association said that petrol prices were expected to rise by around 66 cents a litre in March, while diesel was looking set to go up by 57 cents and illuminating paraffin by 49 cents.
This will bring the price of 95 Unleaded up to R15.63 at the coast and R16.33 inland.
Rising oil prices (and taxes!)
"The international oil price seems unstoppable,” the AA said. “We are in an eight-week streak of price climbs with no sign yet of a ceiling”. Even a stronger rand has not been enough to hold off the higher cost of Brent Crude oil, which was trading at $66.03 at the time of writing, up from around $56 in late January.
An uptick in global economic activity, made possible by the rollout of Covid-19 vaccines, was responsible for the rise in oil prices, the AA pointed out, as was Saudi Arabia’s surprise oil production cut in early February.
"Until oil supply and demand settle into stability, more hikes are likely. And, we cannot forget that April will already start with a significant addition of 26 cents a litre to fuel prices because of increases to the General Fuel and Road Accident Fund levies – inflicting further blows to already battered South African consumers," the association added.
The increased fuel taxes were announced by Finance Minister Tito Mboweni during his annual Budget Speech earlier this week. This comprises a 15 cent per litre increase in the general fuel levy and an 11 cent rise in the Road Accident Fund levy.
April increase could be steep
Worst of all, unless international oil prices start to subside, April’s increase will be even bigger than the 26 cent tax penalty.
The AA believes that the levy increases will ultimately cause more harm than good for the country:
“South Africans are not only feeling the pinch right now, but they are feeling the bite, and an increase to the levies will add to their woes.”