Just when you thought you could take the family vehicle for a long drive, comes yet another fuel price hike. I am sure that all South Africans are weary of taking all these economic below the belt punches all the time. We can expect an increase of between 72c and 75c per litre in the price of petrol on Wednesday, with diesel expected to increase by between 70c and 73c. Now that hurts!
This is according to data released by the Central Energy Fund (CEF) late last week prior to the official announcement from the Department of Mineral Resources and Energy this week.
Projections for the fuel price in February have steadily deteriorated throughout January, going from no change at the beginning to a significant increase by the end of the month.
This is predominantly due to a rise in the price of oil due to the conflict in the Middle East and rising geopolitical tensions.
The Automobile Association (AA) said the numbers indicate that the short-lived relief that South African motorists enjoyed in the past three months is over.
“The movement in international oil prices is contributing a significant percentage to the increases while the weaker average rand to dollar exchange is adding an impactful but smaller margin to the expected increases,” said the AA.
The CEF data showed that the depreciation in the value of the rand contributed over 6c per litre to the increase in the price of petrol and over 7c per litre in the case of diesel.
However, the increases may not yet be as severe as expected due to the decline in oil prices over the past few days.
Oil is now trading at $76.40 a barrel, down from just over $82 dollars a barrel last week when the CEF compiled its data.
The AA also noted that a decrease in the slate levy should provide some relief, but this is not enough to compensate for the rise in global oil prices.
Taking into account these cost inputs, fuel prices in South Africa this Wednesday are expected to be adjusted as follows, according to the CEF:
- Petrol 93 – Increase of 72c a litre
- Petrol 95 – Increase of 75c a litre
- Diesel 0.05% – Increase of 70c a litre
- Diesel 0.005% – Increase of 73c a litre
“The increases to the prices of petrol will have a negative impact on household budgets at this early part of the year while most consumers are recovering from festive-season spending and stretched budgets,” the AA said.
“The cumulative effect on personal finances will be a further reduction of disposable income exacerbated by increases in goods and services, which must recoup the higher fuel input costs.”
So there you have it. It's time once again, to tighten those belts. But there is not much leeway left for all of us to do any more tightening. I suppose we have to choose our road trips wisely and economise where we can.
