Fuel price hikes on the cards
The fuel price is currently around R4 per litre lower than it was before the Covid-19 crisis
THE Automobile Association (AA) has encouraged motorists to be pragmatic and budget accordingly as fuel prices slowly return to their previous levels over the medium to long term.
This as the AA expects the petrol price to increase by R1.18 a litre next month with increases of around 22 cents for diesel and 41 cents for illuminating paraffin.
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‘The global lockdowns under Covid-19 saw fuel demand plummet. The resulting oversupply left storage bunkers full, with the extraordinary outcome that oil prices in the USA briefly dipped below zero.
‘Crude oil prices used to calculate South Africa’s fuel prices had fallen in lockstep with the reduction in demand, but are now inching up as economic activity begins to ramp up on a global scale,’ the AA said on Friday.
They said this should not be unexpected as the fuel price is currently around R4 per litre lower than it was before the Covid-19 crisis hit
‘Fortunately, the rand strengthened during May, which has helped insulate the country from some of the rise.’
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The AA has further advised that motorists may encounter shortages of diesel in the short term.
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’.
‘Some rationing of diesel is taking place, but the SAPIA says it expects diesel supply to normalise once both refineries in Durban reach on-spec production, which is anticipated to be at the end of May,’ the AA said.
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