Fuel going up as oil price, levies bite
Johannesburg - South African motorists will be hit with steep fuel price hikes from April as higher fuel levies and international oil prices take effect.
The Department of Energy has announced that the price of 95 Unleaded petrol will rise by 72 cents a litre in Gauteng and 62 cents a litre at the coast (or 69c and 59c respectively in the case of 93 Unleaded), while diesel prices will rise by 65 cents inland and 55c at the coast.
This will push the price of a litre of 95 Unleaded to R14.48 in Gauteng and R13.89 at the coast.
"International petroleum product prices, which have remained stable since mid-February, have climbed sharply since 12 March," the Automobile Association said in response to month-end fuel data.
The Association said that the rand / US dollar exchange rate had remained stable over the same period, meaning that most fuel prices would have increased even without the additional taxes announced in February's budget speech.
The General Fuel Levy and Road Accident Fund (RAF) levy will go up in April by a combined 52 cents a litre, which makes up the bulk of the aforementioned fuel price hikes. These increases will push the total amount of taxes paid to the levies to R5.30 a litre (from R4.78). This means that around 40% of every litre of petrol is being paid to indirect taxes via fuel purchases.
These increases will also push the price of a litre of petrol closer to its December all-time high of R14.49 (93 octane) and R14.76 (95 octane) inland. Any further increases to international petroleum prices in the near future can mean local pump prices quickly surpass these highs.
"Public transport providers such as taxis and busses will have to cover these increases by passing them directly to consumers, which means more of their already small wage packet goes to transport costs,” the AA noted.
Similarly, the cost of the shipment of goods around the country will naturally also filter through to the prices of general goods, as will the increase in VAT from 14% to 15%.
"The good news is that Moody’s’ decision to hold its current rating and change its outlook to 'stable' gives South Africa much-needed breathing space to address economic issues. We are hopeful increased political and economic stability will spill over into a more stable outlook for fuel prices," the association concluded.