South Africans will be paying record-high prices for petrol as of next month, with the Automobile Association (AA) predicting massive fuel price hikes based on fuel price data from the Central Energy Fund.
“The data shows an increase of R1.25 a litre for 95 octane petrol, R1.24 a litre for 93 octane, R1.29/l for diesel and a significant increase of R1.22/l for illuminating paraffin,” said the AA.
An analysis of the petrol price movement this month shows international petroleum prices are contributing entirely to the expected increases with the stronger Rand buffering what would have been more significant increases.
Petrol prices highest in history
“The Rand is currently trading in a more positive band than it has for some weeks, with the local currency shaving around 17 cents off oil’s negative movement. Without this, the expected increases could have been between R1.40/l and R1.47/l for fuels across the board,” said the AA.
Given the current outlook, petrol prices in South Africa will skyrocket above R21 for the first time, with 95 octane petrol in Gauteng to cost around R21.39/l and 93 octane petrol R21.13/l, outstripping the record high of R20.42/l in December last year.
The coastal price of 95 octane will also breach the R20/l mark for the first time, rising to R20.67/l based on the current data. Diesel and illuminating paraffin will also increase to levels never before seen.
These year-on-year increases forecast by the CEF show substantial percentage increases from March 2021.
“The price of 95 octane petrol inland, for instance, could rise from R16.32 a year ago to R21.39 in March 2022, a 31% increase. The cost of diesel could rise from R14.12 in March 2021 to R19.33 in 2022 – a 37% hike,” said the AA.
The most significant leap is in illuminating paraffin – a fuel used by many for heating, cooking, and lighting.
In March last year, the cost of paraffin stood at R8.45/l. Considering the expected increase of R1.22/l for this fuel, the price in March 2022 could reach R13.19/l (off its current price of R11.97/l), representing a whopping 56% increase year-on-year.
Although the expected increases are significant, Efficient Group chief economist Dawie Roodt notes they align with current economic data.
“These increases aren’t unexpected; they are supported by the numbers, especially those related to international oil prices,” Roodt said.
“Naturally, we are concerned about these expected increases, which will undoubtedly put more pressure on already stretched consumers.
“These hefty increases also reaffirm our belief that a review of the fuel price is necessary to establish if there are any components within the current pricing model that can be revised to mitigate against rising costs,” said AA.
The organisation is appealing to Finance Minister Enoch Godongwana not to increase the General Fuel and Road Accident Fund levies in his Budget Speech next week.
The organisation is also pushing for a review of the fuel price to determine if there are factors that can mitigate against rising fuel costs.
It has created a petition calling on the government to consider this.
Petition signatures to #ReviewTheFuel will be submitted to the Finance Minister ahead of the Budget Speech on 23 February.
Compiled by Narissa Subramoney
NOW READ: Petrol and diesel prices to increase from Wednesday