By Lesedi Sibiya-Diplomatic Insider
South Africa is set to be impacted by fuel price hike in the month of April due to escalated oil prices internationally as well as a weakened rand which threatens to cause fuel prices to soar to shocking amounts.
According to data presented by the Central Energy Fund, there are indications of South Africa potentially facing the largest monthly fuel price increase in South African history and there is caution of worse to come.
The current prediction of the oil prices sit at R2.41 per litre and diesel prices could soar to R4.50 for the 50ppm variant as these projections are considered a “best case scenario”. Recent figures have shown an under-recovery for diesel sitting at R7 a litre which sits alongside a R3.78 shortfall for petrol.
If the current oil price trends and currency fluctuations continue, then consumers are to expect a rise over R3 with diesel edging towards R5. As it currently stands 95 Unleaded Petrol currently sits at R19.47 at coastal locations and R20 in Gauteng. 93 Unleaded sits at R20.19, wholesale rate for diesel is R17.84 at the coast and inland costs are R19.17.
The reason for these increases are due to geopolitical tensions between the US-Israel and Iran which has caused risks regarding energy markets. There are also concerns over the security of the Strait of Hormuz, which allocates 20% of the planet’s crude oil reserves. Enoch Godongwana, who serves as Minister of Finance, highlighted in his budget speech that fuel taxes are set to increase.
As of April 1 South Africans will encounter a tax of 21 cents per litre due to adjustments in the general fuel levy (9 cents), Carbon levy (5 cents), and Road Accident Fund levy (7 cents).
“To maintain product availability in our country, as communicated last week, the department remains in constant engagement with industry players to explore all possible supply sources. These engagements are aimed at ensuring uninterrupted fuel availability in the domestic market, without immediately utilising the country’s strategic reserves” said Minister of Mineral and Petroleum Resources, Gwede Mantashe speaking at a Southern Africa Oil and Gas conference in Cape Town this past Monday.