WITH lockdown affecting the demand for fuel, petrol prices are expected to climb in June and motorists may encounter shortages of diesel in the short term. This is according to the Automobile Association (AA) which was commenting on unaudited month-end fuel price data released by the Central Energy Fund.
A hefty price hike is expected to see petrol rise with an increase of up to R1.18 a litre, with increases of around 22 cents for diesel and 41 cents for illuminating paraffin.
“The global lockdowns under Covid-19 saw the fuel demand plummet. The resulting oversupply left storage bunkers full, with the extraordinary outcome that oil prices in the USA briefly dipped below zero,” said the AA .
According to the AA, crude oil prices, which are used to calculate petrol prices, fell as the demand for fuel fell. These prices are beginning to increase as economic activity begins to ramp up on a global scale.
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“This is not unexpected, and South Africans should remember that the fuel price is currently around four Rand per litre lower than it was before the Covid-19 crisis hit. Fortunately, the Rand has strengthened during May, which has helped insulate the country from some of the rise,” said the AA.
Despite the moderate price rise for diesel, motorists may encounter shortages of diesel in the short term, added the AA.
According to the South African Petroleum Industry Association (SAPIA), the economy has recovered more rapidly than expected, leading to a dramatic increase in the demand for diesel which refineries are currently not able to meet.
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“Stock rationing is been implemented to manage demand and to preserve stock. Unplanned shutdowns were a contributing factor which led to this and the shortage. It is likely to continue until the end of May. Both refineries in Durban are currently starting up and on spec production is expected by month end. Diesel supply will then normalise,” said SAPIA in a statement.
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