Economists and the AA have warned that a fuel price increase of around 60c/l is on the cards for Wednesday.
Layton Beard, spokesperson for the AA, said unaudited fuel data from the Central Energy Fund (CEF) was showing significant increases for all grades of fuel this month.
“The numbers are indicating that the short-lived relief South African motorists had is over. According to the data, 93 ULP and 95 ULP petrol are expected to climb by between 64 cents a litre and 66c/l respectively, while diesel is expected to increase by around 63c/l.”
Beard added that the movement in international oil prices was contributing to the increases.
“To a smaller degree the rand exchange to the US dollar is also having an impact on the expected increases. Based on these numbers, a litre of 95 ULP inland will climb from its current level of R22.49/l to R23.15/l, while the price of 93 ULP inland will increase from R22.17/l to R22.81/l.”
Professor Irrshad Kaseeram, from the University of Zululand’s Economics Department, said petrol and diesel prices were expected to rise by around 65c/l and 63c/l, respectively.
“This is due to the upward movement in the oil price and the weakening of the rand-dollar exchange rate. It will marginally affect consumers; a 50-litre tank will now cost an extra R39.”
Kaseeram said the trucking industry will be affected as well.
“We can marginally expect a small rise in food prices. Commuter/ taxi charges are likely to remain unchanged for the costs will be absorbed by the business.”
Johann Els, Old Mutual Group chief economist, said he also expected the fuel price to increase. “It’s not great news for the consumer already under pressure because of high inflation and high food inflation. We also have to bear in mind the higher interest rate. The only respite is that the prices are still a bit lower than in August last year as we had three decreases at the end of the year.”
Mervyn Abrahams from the Pietermaritzburg Economic Justice & Dignity Group said when petrol and diesel prices go up, it causes an increase in food prices.
“We however feel that these increases should not be felt on the shelf immediately. We expect in a month or so that we could see higher food prices. It is also concerning that when fuel goes up, prices go up, but when there are decreases, prices don't come down.”
Road Freight Association (RFA) chief executive Gavin Kelly said as with all increases introduced into the logistics chain, there will be a similar effect on the consumer once the ripple effect through the supply chain had begun.
“Unfortunately, whether we like it or not, there will be increases in the transport of goods (and passengers) which we will feel rather sooner than later. We have seen a decrease in the last two months of 2023 and January 2024, so this will be the first of a possible set of increases should the situations in Ukraine and the Middle East not be amicably resolved.”