Motorists warned to brace for petrol price hike next month

Motorists have been warned to brace for a petrol price increase after a series of decreases over the past few months.

According to the Automobile Association (AA), the five-month trend of fuel decreases is set to end in November when the Department of Mineral Resources and Energy announces the adjusted petrol prices.

Petrol price increase

Commenting on unaudited data from the Central Energy Fund (CEF), the AA said it expects the first fuel price increase since May in November due to higher international product prices, a steady softening of the rand against the US dollar, and the crisis in the Middle East.

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“According to the CEF’s figures, ULP95 is expected to be slightly higher by around 14 cents a litre, while ULP93 is set for an increase of around three cents/l. Diesel is expected to increase by between 14 cents and 13 cents/l while illuminating paraffin will increase by around seven cents a litre.”

Middle East crisis

The AA said “lower stable fuel prices” play a crucial role in the decrease of inflation, and in lowering of the prices of goods and services.

“It would greatly benefit our economy if the fuel price decrease trajectory continued for longer but the expectant increase, though marginal at this stage, comes at a time when most consumers and motorists are still struggling financially and any increase now will add pressure on them.”

The AA said due to the tensions in the Middle East, the local currency could be under significant pressure going into the last two weeks of October.

“This could have a more significant impact on local fuel prices in November. At this stage it is important to keep an eye on that indicator as we head into the new month.”

R14/Litre

Earlier this month, Minerals and Petroleum Resources Minister Gwede Mantashe said government remained committed to lowering the cost of fuel.

He was speaking at the African Oil Week (AOW) conference in Cape Town.

Mantashe said discussions between his department and National Treasury on how to decrease fuel prices are ongoing.

Petrol price distortion

Mantashe said the GFL and RAF levy had “distorted” the prices of petrol and diesel to R20. He said the proper price of petrol and diesel should be R14, based on his department’s calculations.

“There is a broad discussion on how the fuel price can be reduced, taking into account the cost of living. One of the things we are looking at, including having engagements with National Treasury, is the RAF and general fuel levy. National Treasury will look into the impact on the fiscus for the general fuel levy, and we will look into the impact on general living standards.”

The RAF said its levy has remained stagnant for the past three financial years at R2.18 per litre of petrol and diesel.

In 2022, Mantashe and Finance Minister Enoch Godongwana announced a temporary reduction in the general fuel levy amid rising fuel prices after the invasion of Ukraine.

Officially adjusted fuel prices come into effect on Wednesday, 6 November.

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