Massive petrol and diesel price hikes looking likely for April
JOHANNESBURG - South African motorists are likely to be hit with a petrol price hike of well over R1 a litre from the beginning of April as rising oil prices and increased taxes deal a double blow to consumers who are already over-stretched.
Not only are fuel taxes set to increase by 27 cents a litre from April, but mid-month data released by the Central Energy Fund shows that this will take place in addition to general increases of around 90 cents a litre for petrol and 65 cents a litre for diesel - assuming, of course, that there is no significant movement in international oil prices and the local currency.
Record fuel prices up ahead
If the current trends persist until the end of this month, petrol could go up by R1.17 a litre in April, and diesel by 92 cents. This would bring the cost of a litre of 95 Unleaded up to R16.79 at the coast and R17.49 inland, where the cheaper 93 ULP would theoretically rise to R17.32.
These increases would make petrol more expensive than it’s ever been in South Africa, even surpassing the October 2018 highs of R16.49 for coastal 95 Unleaded Petrol and R16.85 for inland 93 ULP.
The wholesale price of diesel (not to be confused with retail prices, which differ as the fuel is unregulated) looks set to increase to R14.23 at the coast and R14.83 inland, which still undercuts the respective all-time highs of R15.63 and R16.12 in late 2018.
Increased tax burden
During his 2020 Budget Speech held in Parliament in February, Finance Minister Tito Mboweni announced fuel levies would increase by 27 cents in total. This comprises a 15 cents per litre rise in the general fuel levy, while the Road Accident Fund levy is set to increase by 11 cents and the Carbon Fuel levy by 1 cent.
Over R6 in tax for every litre in your tank!
This will see the General Fuel Levy rise from the current R3.77 to R3.92, while the Road Accident Fund levy will increase from R2.07 to R2.18. That amounts to R6.10 in taxes for every litre of fuel that you put in your tank. Want to fill your Toyota Hilux’s 80 litre tank with diesel? That’s R488 in taxes alone.
While fuel taxes are nothing new, the steep price rises that we’ve seen in the last year are mainly due to rising international crude oil prices.
Consider that oil plunged to an all-time low of $20 a barrel as the Covid-19 crisis sent the world economy into freefall in early 2020, but it has since risen to a shade under $70 a barrel (at the time of writing).
According to the Automobile Association, oil prices are being driven up by the positive economic sentiment caused by the global rollout of Covid-19 vaccines.
Data sources: Automobile Association, Central Energy Fund & Department of Energy