Trends are showing that another massive fuel price hike is likely at the end of May. This is according to the Automobile Association (AA), which was commenting on unaudited mid-month fuel price data released by the Central Energy Fund.
“Last month’s fuel price account was closed earlier by the Department of Energy, resulting in the postponement of a substantial 50 cent-per-litre increase brought on by a weakening Rand and rising international oil prices at the end of April,” the AA explains.
“However, this means the country started the month (May) with a substantial fuel price deficit. In the first half of May, the fuel picture has continued to worsen, with steep oil price rises and ongoing weakness of the Rand against the US dollar.”
South African fuel users are currently facing increases of 74 cents a litre for petrol, 81 cents for diesel, and 78 cents for paraffin. The AA expresses its concerns over the impact of these price hikes on the economy.
“Rises in the fuel price increases the cost of doing business, and companies have few options but to pass these costs on to consumers. Worryingly, people who use illuminating paraffin for lighting, heating and cooking will suffer a further blow as the country heads into winter,” the Association says.
“The deferred loss from last month will be included in this month’s adjustment, which is currently looking to be substantial,” the Association concludes. – AASA