• The AA warns that petrol is set for to increase by approximately 90 cents a litre, diesel by some 66 cents, and illuminating paraffin by around 62 cents – even before increases to levies are taken into account.
• The association was commenting on unaudited mid-month fuel price data released by the Central Energy Fund.
• Either the rand or international oil prices would require a sharp reversal if the picture is not to deteriorate further by month-end.

Expect “extremely high” fuel price increases at the end of March, going into April, the Automobile Association (AA) warned on Monday.

The AA was commenting on unaudited mid-month fuel price data released by the Central Energy Fund.

The AA explained in a statement that steepening climbs in international petroleum prices are being worsened by a dipping rand/US dollar exchange rate. Furthermore, fuel levy increases will contribute to these expected high increases in fuel prices.

“As things stand today, petrol is set for a 90 cents-a-litre rise, diesel for an increase of 66 cents, and illuminating paraffin an increase of 62 cents,” the AA said.

These expected increases do not include the 26-cents a litre increases to the General Fuel and Road Accident Fund levies (excluding the one cent increase to Carbon Tax) announced by Minister of Finance Tito Mboweni in his Budget 2020. These come into effect in April.

“Within the current scenario, with the addition of the levies, petrol is expected to increase by a whopping R1.16 a litre and diesel by 92-cents a litre,” said the AA.

With the expected increases factored in, a litre of 95 ULP Inland (currently at R16.32/l) will now cost R17.48/l of which R6.10 will be taxed through the GFL and RAF. This means that at least 35% of the cost of a litre of this petrol will be taxed.

The price of diesel (currently pegged at R14.12/l) will increase to R15.04 of which R5.96 (including increased levies) will be taxed – at least 40% of the total cost.

“Either the rand or international oil prices would require a sharp reversal if the picture is not to deteriorate further by month-end,” the AA said, adding that government can “no longer ignore the knock-on effects of severe fuel price rises.”

“The cost is not only direct, but throughout the value chain, and is battering consumers from all sides. It requires urgent review to help ease pressure on consumers who are battling to stay financially afloat.”

SOURCE:

Expect ‘extremely high’ fuel price hikes at month end, AA warns | Fin24 (news24.com)