Motorists have been warned to brace for further fuel price hikes at the pumps, but logistics businesses can expect a possible drop in the price of diesel in May.
This comes as the latest data released by the Central Energy Fund (CEF) indicates that it’s likely there will be significant increases to the prices of both grades of petrol, pushing the cost of these fuels above R23 for the first time this year. The unaudited data shows a decrease in the price of both diesel and illuminating paraffin.
Commenting on the data, the Automobile Association said the expected increases would add further pressure on battling consumers, who are grappling with food inflation that hit record highs in the first quarter of 2023.
According to the latest data from the CEF, ULP95 is expected to climb by around 52cents/litre, and ULP93 by around 56cents/litre. The wholesale price of diesel is expected to decrease by between 31c/l and 57c/l, while the cost of illuminating paraffin is forecast to come down by around 32c/l.
“The decrease to diesel and paraffin prices is certainly good news, especially as the country enters colder months. But the increases to the petrol prices will add more strain to already stretched budgets, and consumers are advised to revise their budgets accordingly,” the AA said.
“There is no doubt these are difficult times, and petrol price increases will come as bad news for many who will have to dig even deeper in their pockets to keep mobile.”
The surge in international oil prices is the main driver contributing to the under recovery in petrol while the average rand/US dollar exchange rate during April is providing some relief, without which the increases could have been higher.
“The silver lining, though, are the expected diesel price reductions. Diesel is a big input cost in major sectors such as agriculture, mining and manufacturing and an increase here often contributes to increased prices of basic commodities. The current increase in the consumer price index to 7.1% in March and food inflation hitting a 14-year high of 14.4%, plus an increase in diesel prices, would have resulted in very unfavourable conditions for consumers,” the AA added
The officially adjusted fuel prices come into effect on 3 May. The Department of Mineral Resources and Energy is expected to announce the price changes in the next few days.
