ALTHOUGH basic fuel prices are showing signs of further decreases at month end, the overall price of fuel is set to increase because of the addition of increased fuel levies in April.
This is according to the Automobile Association (AA), which was commenting on unaudited mid-month fuel price data released by the Central Energy Fund.
ALSO READ: Rand drives fuel price drop, says AA
The AA said in a press statement that the Rand/US dollar exchange rate has been virtually flat since the beginning of the month, with the local currency having weakened against the dollar by around two cents.
It noted that during the same period, international oil prices retreated slightly in favour of South African fuel users.
The Association claimed that petrol is indicating a likely decline of around 12 cents a litre, diesel 18 cents, and illuminating paraffin 13 cents.
However, the Association said despite these predicted decreases to the basic fuel price, the additional 52 cents to the fuel levies will push the overall price of fuel at the pumps up going into April.
“Even though there’s a decrease of 12 cents a litre to the basic price of petrol, the overall price will jump 40 cents in April because of the increases to the General Fuel and Road Accident Fund levies announced by former finance minister, Malusi Gigaba in his Budget speech in February,” wrote the AA.
The Minister announced the general fuel levy will increase by 22 cents a litre from R3.15 to R3.37 (7 per cent increase), and the RAF levy will increase by 30 cents from R1.63 to R1.93 (18 per cent increase).
ALSO READ: Automobile Association concerned about the increases made by the Minister of Finance
At present 38 per cent and 39 per cent of a litre of 93 octane unleaded petrol inland and coastal goes towards taxes (levies).
Predicted prices
A litre of unleaded 93 octane fuel inland currently costs R13.54. With a predicted basic fuel price decrease of 12 cents (in April), this will move down to R13.42. But, the overall price of a litre will increase to R13.94 with the additional 52 cents a litre on the levies.
A litre of unleaded 93 octane at the coast currently costs R13.13. With the predicted decrease of 12 cents this will move down to R13.01 a litre but, again, the overall price will increase to R13.53 with the increase to the levies.
The Association said the increases to the levies is concerning and will impact the poorest of the poor the hardest.
“The increases are way above inflation, and will have a knock-on effect on other prices, including public transport. The poor, who are already under enormous financial strain, will bear the brunt of these increases, which come at the same time VAT is increasing to 15 per cent. These increases will unfortunately result in a heavier burden for the very people who need relief the most,” added the AA.
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