The petrol price hit its highest level in SA with the 34c-a-litre increase that came into effect at midnight.
However, more increases are expected when higher fuel taxes are announced in the national budget this month.
The new pump price for 95 grade petrol is R10.65 a litre at the coast, while inland motorists will pay R10.95 a litre. Queues were seen at many petrol stations in Durban last night, with people filling up before the hike.
“The petrol price is at its highest… It has now risen above levels last seen in 2008, when the global financial crisis was at its peak,” said AA spokesman Gary Ronald on Tuesday.
The energy department announced the petrol price hike on Friday, along with news that LP gas would increase by 50c/kg. However, diesel dropped by 2c a litre and paraffin by 4c a litre.
SA is a net importer of oil and needs to adjust its fuel price each month to account for changes in the rand-dollar exchange rate, the international oil price and government levies.
“This is a significant increase in the petrol price and it will have an impact on both ordinary South Africans as well as businesses. The marginal drop in the diesel price will help, but not enough to curb the inflation of food and transport costs,” said Ronald.
“To put it into context, the petrol price increase will see consumers paying about R20 more for an average tank of fuel. For a person travelling between Durban and Pietermaritzburg daily, that works out to more than R100 extra spending a month,” he added.
Ronald said the fuel price was set to rise yet again when Finance Minister Pravin Gordhan increased fuel taxes in his annual Budget speech on February 22.
He said any volatility in the rand or oil prices would push up fuel prices further.
“We can expect the finance minster to increase the fuel levy and levy for the Road Accident Fund in his budget by about 20c a litre. At the current prices, this will take petrol in Gauteng to above R11 for the first time. Psychologically, that will be a shock for consumers,” Ronald said.
KZN economist Clive Coetzee also warned that spiralling energy costs, including electricity and a volatile oil price, could scupper already moderate economic growth prospects.
“Besides the European financial situation, potential oil price shocks as a result of the political stand-off between oil-rich Iran and the West (the EU and the US) is a concern. We can’t afford such a shock. If oil goes to around $150 (about R1 167) a barrel, which some people have predicted, then we are in for trouble,” he said.
Ronald agreed, saying: “Conflict in the Middle East would push up oil prices, and this will have a ripple effect around the world. What’s concerning is that oil hedge funds look forward to such situations and there is a further risk of them precipitating an artificial inflation of the oil price.” - The Mercury
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