Fuel prices in May will increase by around 49 cents a litre as of 2 May, and not 92 cents as earlier predicted by the Automobile Association (AA). The error occurred due to an earlier closing off of the reporting period for fuel increases by the Department of Energy.
The Automobile Association (AA) commented earlier on unaudited month-end fuel price data released by the Central Energy Fund (CEF), based on the figures provided up to yesterday (25 April). According to these figures, the under-recovery (and therefore the predicted increase at the pumps) of the fuel price was 92 cents a litre.
However, the Department of Energy has based its new fuel price for May on the figures of Tuesday (24 April), which indicate an increase of 49 cents a litre for petrol, 60 cents for diesel, and 52 cents for illuminating paraffin.
Based on these figures, a litre of 93 octane unleaded petrol (inland) – which currently costs R14.23 a litre – will now cost R14.72. This is 23 cents higher than the previous record high of R14.49 in December last year.
“Even with the revised data, these increases are significant and are attributable to a weakening Rand against the US dollar, and increasing international petroleum prices. We remain concerned about the increases, especially those to illuminating paraffin. Users of this fuel will be hit particularly hard as we head into the colder months where many households use this fuel for lighting, heating and cooking,” says the AA.
It should be noted – says the AA – that despite this earlier closing off of the reporting period, the depreciation of the Rand the past few days will impact on future fuel prices.
“Going into May, there is already an under-recover of 46 cents a litre. If the Rand doesn’t appreciate significantly against the US dollar, and if international prices don’t decrease, this will mean another increase into June,” notes the AA.
The revised predicted price increases must also be seen against the backdrop of the substantial increases to fuel prices in April, which saw the addition of 52 cents a litre being added for the general fuel and Road Accident Fund levies.
FUEL PRICE TO SPIKE IN MAY:
Fuel prices will hit record highs in May. This is according to the Automobile Association (AA) which was commenting on unaudited month-end fuel price data released by the Central Energy Fund (CEF).
“A substantial weakening of the Rand against the US dollar has combined with sharp increases in international oil prices to produce a new record-high fuel price of over R15 Rand a litre for fuel,” the AA says.
The previous highest price for fuel was in December last year when petrol cost R14.76 a litre.
“The outlook at mid-month, of around a 50 cents-a-litre increase, appeared manageable, but the sharp deterioration in the position of the Rand over the past week has been almost without precedent,” the Association comments.
Petrol is set to increase by 92 cents a litre, diesel by R1.07 and illuminating paraffin by R1.06.
The expected increase will move the cost of a litre of fuel, 93 octane (inland) to R15.15 a litre. At the same time last year, this fuel cost R13.57 a litre. The increase represents a R1.58 increase year-on-year, an 11.64% increase.
Based on the current price of R14.23 for a litre of 93 unleaded octane petrol (inland), a 50 litre tank of fuel costs R711.50. With the expected 92 cents a litre increase, this fuel will now cost R15.15 a litre. Filling a 50l tank will cost R757.50, R46 more than last month.
“This increase is going to hit users of illuminating paraffin particularly hard as we head into the colder months where many households use this fuel for lighting, heating and cooking,” says the AA.
These expected increases come on the back of the substantial increases to fuel prices in April, which saw the addition of 52 cents a litre being added for the general fuel and Road Accident Fund levies.
“Motorists should be aware that further oil strength and Rand weakness could produce further increases in the short to medium term,” the Association concludes. – AASA