Ouch! Petrol price to sky-rocket on Wednesday, says AA
Weakening rand and strong oil prices will see local consumers reeling
Strong oil prices and an ever-weakening rand have combined to set up another massive fuel price hike. This is according to the Automobile Association (AA), which was commenting on unaudited month-end fuel price data released by the Central Energy Fund.
"These increases will be compounded by rises in fuel taxes which come into effect in April. There will be an additional 15c a litre on the fuel levy and 5c a litre for the Road Accident Fund," the AA says. These levies don't apply to illuminating paraffin.
Given the latest data, petrol is expected to increase by R1.28 a litre, diesel by 77c and illuminating paraffin by 56c.
"The landed price of diesel continues to trade at around the level it reached in mid-February, after a substantial jump earlier in that month," the AA says. "But the real horror show is the landed price of petrol, which has increased from R6.60 a litre at the beginning of March, to R7.40 a litre now."
The AA says the rand has also gone downhill against the US dollar during this time.
"The daily exchange rate opened the month at R14.15/$ and has slipped to R14.65/$. The effects on the fuel price make for unpleasant reading," the AA adds.
Diesel and illuminating paraffin have come off comparatively lightly, with increases of 57c (excluding the additional levies) and 56c a litre respectively. But the petrol price has been battered by both product price increases and the weakening rand, yielding an increase of R1.08 a litre, excluding the additional levies.
"We are exceptionally concerned about the rand's trajectory, given that no specific factors have arisen this month which could account for the decline," the AA says.
"The currency's slide might reflect an accelerating loss of appetite for foreign direct investment in South Africa. We urgently call on government to take concrete steps to address the economic weaknesses which are affecting the country's attractiveness to foreign capital," the AA concludes.