AA predicts brutal fuel price increase in June
The rand/US dollar exchange rate in combination with a weaker rand and high oil prices dictate significant increases across the board for fuel and paraffin prices.
![Different gas diesel pistols, at gas station.](https://images.caxton.co.za/wp-content/uploads/sites/126/2022/05/different-gas-diesel-pistols-at-gas-station-780x470.jpg)
The Automobile Association (AA) said consumers face further pressure as government’s earlier relief of reducing the general fuel levy (GFL) ends in May, which, when returned to the GFL, will result in price shocks never seen before.
“In late March, government reduced the GFL by R1.50 for April and May, which brought temporary relief to consumers. The big question now is how government plans to deal with rising fuel costs from June onwards, especially given that baseline prices are forecast to move significantly upwards in June. Based on current, unaudited data from the Central Energy Fund, petrol is expected to increase by between R1.93 and R1.97 a litre, diesel is expected to increase by between R1.60 and R1.62 a litre, and illuminating paraffin is expected to climb by a whopping R2.14 a litre,” noted the AA.
The association said it must be noted that these price increases reflect data from the middle of the month, and that the final data may vary between now and when the adjustment is finally made.
The AA said while government’s relief on the GFL was welcome, a longer term solution is needed. It said when government announced the relief in March, it also noted other measures proposed by the minister of mineral resources and energy, Gwede Mantashe, to be introduced after the expiry of the temporary measures.
“We are rapidly nearing the end of May and the fuel outlook is looking bleak. The government needs to address this issue sooner rather than later; consumers are anxious about what lies ahead, and government should allay these concerns by indicating as early as possible what steps it will be taking to mitigate against rising fuel costs,” concluded the AA.
Source: AA