Weak rand blamed for latest R1 petrol increase
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Johannesburg - Motorists are in for a shock Wednesday morning. They will wake up to a whopping R1 a litre fuel price hike.
For the second time in three years, petrol prices will surpass the R17/litre mark.
Currently selling for R16.32 in Gauteng, the 95 unleaded fuel will be priced R17.32 overnight, while 93 unleaded will spike to R17.10 and diesel will go up 65 cents a litre in Gauteng.
The Central Energy Fund (CEF) has confirmed the price adjustments. It pointed out that the R1 increase was inclusive of the 27c that Finance Minister Tito Mboweni announced for Road Accident Fund (RAF) levies.
These levies were charged on both petrol and diesel. Still, with the levies not applicable, illuminating paraffin will shoot up by 35c a litre.
The petrol price last crossed the R17 mark in late 2018 when it reached a high of R17.08.
The CEF blamed the weakened rand for the fuel hikes.
“The rand depreciated against the dollar during the period under review, on average, when compared with the previous period,” it said.
“This led to a higher contribution to the basic fuel prices of petrol, diesel and illuminating paraffin.”
The increase on fuel and RAF levies meant motorists would be paying 35% to 40% in taxes on every litre purchased, said the Automobile Association (AA).
From tomorrow, motorists will be paying R5.96 per litre of fuel to the levies.
After hiking the levies by 52c a litre in 2018, the government faced a public outcry that it should rather consider reducing them.
At the time, the ANC also called on its own government to “seriously consider freezing or decreasing the fuel levy”.
The governing party said the increases directly affected the poor because “the monopolistic food outlets pass the transport costs to them”.
But the government shot down the calls. It said reducing the levies was not an option because they brought in an extra R1.2 billion to the fiscus.
The latest increases could be expected to have a ripple effect on households, added the AA.
“We can only stress again the severe additional damage these increases will do to household budgets, both directly and indirectly, as the increased transport costs ripple throughout the value chain.
“Increased public transport fares will surely also not be far off either,” the AA said.