Just as South Africans breathe some inflationary relief, with consumer price inflation CPI having dipped to 4.7% in July, fuel prices are heading for a massive increase.
Although the official petrol and diesel prices will only be announced by the Department of Mineral Resources and Energy early next week ahead of the adjustments taking effect on Wednesday, September 06, the month-end unaudited data from the Central Energy Fund (CEF) gives us a strong indication of what to expect.
According to this CEF data, the huge under-recovery on petrol is pointing towards an increase of R1.65 for 95 Unleaded and R1.60 for 93 Unleaded, while diesel is heading for hikes of between R2.76 (50ppm) and R2.85 (500ppm).
Although this unaudited data is usually a very accurate predictor of upcoming price adjustments, keep in mind that the final prices could still differ, particularly when factors such as the Slate Levy, which compensates fuel companies for oil price fluctuations during the month, are factored in.
As it stands, however, and assuming the above predictions prove accurate, South African motorists will be paying R23.76 for a litre of 95 Unleaded petrol at the coast and R24.48 in the inland regions from September, while the cheaper 93 Unleaded would theoretically rise to about R24.03.
The forecast diesel price adjustments would push the wholesale price of 500ppm to around R22.34 at the coast and R23.06 inland, and 50ppm to a respective R22.58 and R23.29.
Keep in mind that this excludes the retail margins, which differ between outlets as diesel is deregulated, but these usually fall somewhere around the R2 mark. Thus a litre of 50ppm diesel is likely to cost you around R24.58 at the coast and R25.30 inland from September.
As mentioned earlier, South Africa’s general inflation is moving in a good direction, but the sharply higher diesel prices could eventually counteract that trend, leading to higher prices at the till, the Automobile Association (AA) warned.
“Motorists will certainly feel the pinch in terms of higher prices at the pumps but consumers across the board can expect higher prices to all goods and services because of these hikes,” the association said.
September’s predicted increases are largely as a result of higher international oil prices, the AA said, contributing between 80% and 88% to the projected price hikes.
Watch this space early next week for the official fuel price announcement.