South African motorists will have to fork out more than R2 extra a litre for petrol at the pumps while the price of diesel will rise more than R1 at midnight on Tuesday, May 31.
The Central Energy Fund announced the latest fuel price hikes moments after Minister of Finance Enoch Godongwana, and Minister of Mineral Resources and Energy,Gwede Mantashe earlier announced the extension of the temporary relief in the fuel levy until August 3.
The fuel price would have increased by around R4 per litre without the extension of the reduced levy relief.
The price of 93 petrol will increase by R2.43 per litre and the price of 95 petrol will go up by R2.33 per litre, while the price of diesel (0,.05%) and diesel (0.005%) will increase by R1.10 and R1.07 respectively. The wholesale price of illuminating paraffin will rise by R1.56 per litre and the single maximum national retail price (SMNRP) of paraffin will go up by R2.08. LP Gas will now cost an additional 51 cents per litre.
Godongwana and Mantashe earlier announced a temporary reduction in the general fuel levy of R1.50 per litre from April 6 to May 31 to provide limited short-term relief to households from rising fuel prices following the Russia/Ukraine conflict.
The relief was to be funded by the liquidation of a portion of the strategic crude oil reserves.
However, the ministers said in a joint statement on Tuesday that the continuation of the conflict, supply chain bottlenecks, and a tightening of global monetary policy had since led to further “unfavourable changes” in the two key drivers of the regulated petrol price, the exchange rate and the global oil price.
“These events have led to even larger increases in fuel prices compared to a few months ago when the temporary fuel levy relief was introduced.
The withdrawal of the temporary relief in the general fuel levy on May 31, 2022, as per the original announcement, would contribute to an increase in petrol prices of close to R4 per litre, and push prices of 95 octane unleaded petrol (ULP) to above R25 per litre, an increase of just under 20% next month,” the ministers said.
Godongwana submitted a letter to the Speaker of the National Assembly requesting the tabling of a two-month proposal for the extension of the reduction in the general fuel levy.
“This will take the form of a continuation of the relief of R1.50 per litre for the first month, from 1 June 2022 to 6 July 2022, and then a downward adjustment to the relief for the second month to 75c per litre from 7 July 2022 to 2 August 2022. The temporary relief will be withdrawn from 3 August 2022. The Chair of the National Council of Provinces has also been informed of this proposal,” the ministers said.
The revenue foregone from the extension of the relief is estimated at R4.5 billion.
“Unlike the previous announcement, this proposal is expected to have an impact on the fiscal framework as it will not be fully funded through a sale of strategic oil stocks,” the ministers said.
They added that the government would continue to monitor the impact of the Russia/Ukraine conflict and zero-Covid policies, which impact energy and food prices and result in supply chain shocks, with the aim of investigating further measures to make households and businesses less vulnerable to these economic shocks.
