Fuel price shock on the horizon

South Africans can expect a major upward shift in fuel prices in March, delivering yet another blow to already embattled consumers.

Commenting on mid-month fuel data released by the Central Energy Fund (CEF), the Automobile Association (AA) notes that the current data is projecting fuel prices to jump the R24/litre mark for both grades of petrol edging close to the R25/l record high seen last year.

Based on the current data, 95 octane petrol is set to increase by R1.35/l, 93 octane is expected to climb by R1.31/l, diesel by between R1.43/l and R1.59/l and illuminating paraffin by 96c/l.

International product prices are playing a significant role in the expected fuel increases while movement in the Rand/US Dollar exchange rate is contributing marginally to the under-recovery of the basic fuel prices.

“We remain concerned about these expected increases which will undoubtedly put more pressure on already stretched consumers. These hefty increases also reaffirm our belief that a review of the fuel price is necessary to establish if any components within the current pricing model can be revised by the Department of Mineral Resources and Energy (DMRE) to mitigate against rising costs, especially for diesel as higher input costs will be recovered through higher prices at the till.

“In addition, we again call on the Minister of Finance to strongly consider not increasing the General Fuel and Road Accident Fund levies in his Budget Speech on 21 February. Any relief – even in the form of non-increases – would be welcome to a consumer base already reeling from economic hardship,” the AA concludes.