Motorists have been dreading another harsh fuel price hike ever since Finance Minister Pravin Gordhan announced, during his Budget Speech in February, that fuel taxes would increase by 39 cents a litre from the beginning of April.
However, if current oil price and currency trends persist, South Africans could be cushioned from these tax hikes (of which 30 cents is allocated to the general fuel levy and 9c to the Road Accident Fund), and may even experience some relief at the pumps.
Currently we’re halfway through the cycle that will determine April’s fuel price (24 February to 30 March) and the data released by the Department of Energy for the month so far averages out to a petrol price decrease of 49 cents a litre, which would be cut down to 10 cents a litre once the new fuel taxes were factored in. Unfortunately the diesel relief only averages 25 cents thus far, meaning that unless the rand/oil scales tip further in our favour, the diesel price could rise by around 14 c/l.
Although this over-recovery situation only applies to the first half of the month, and much can still change between now and the end of March, an even more positive picture emerges if we look at recent daily stats. In fact, the daily over-recovery figure on Monday shot right up to 71 cents a litre for petrol and 56 c/l for diesel.
While the rand has weakened in the past week over fears of US interest rate hikes, the local currency is still, on average, better off than it was in February. Oil prices have also been working in our favour of late, having fallen by around $3 a barrel since the beginning of last week on news of unexpectedly high oil reserves in the US.
April’s fuel price is due to be announced on Friday, 31 March. Petrol currently retails at R13.54 in Gauteng and R13.06, for 95 Unleaded.