Johannesburg - South African motorists will be dealt yet another petrol price blow on Wednesday, May 1, with the price expected to rise by over 50 cents a litre, while current trends point to another possible increase in June thanks to a weak rand and surging international oil prices.
There will be some, albeit very slight, relief for those driving diesel-powered vehicles however as the price of diesel is expected to remain unchanged in May, give or take a cent or two.
This is the picture painted by late-month unaudited fuel price data released by the Central Energy Fund, which also points to a petrol price hike of around 53 to 54 cents a litre in May. The final prices are expected to be announced this Friday.
A 53c increase would push the price of 95 Unleaded up to R16.02 at the coast and R16.66 in Gauteng, with 93 Unleaded retailing at R16.47.
May’s fuel prices will be the second highest on record, coming close to the prices last seen in October and November 2018, when a litre of 95 (inland) cost R17.08.
The rand and Trump to blame
While rand strength did help absorb some of the fuel price pressure earlier in April, the local currency has in the last week lost significant ground to the US dollar, depreciating from the R13.92 mark on April 15 to R14.21 on the 24th of the month.
Yet the biggest threat to fuel affordability at this stage is international oil prices, which hit their highest levels since November on Tuesday after Donald Trump tightened sanctions on Iran.
Previously the US had granted exemptions to countries such as China and India, which allowed them to continue buying oil from Iran despite the US sanctions against the Middle Eastern country, but now those have been lifted, which has sent prices surging on fears of tightening global supply.
On Wednesday, April 24, brent crude was trading at R73.58.
Unless other Opec countries make up the shortfall from Iran, which is the world’s fourth-largest oil producer, oil prices will likely continue to rise, resulting in further fuel price increases in June and possibly beyond.