Petrol price could go up by R2 in April | Fin24
 
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Petrol price could go up by R2 in April

Mar 17 2015 15:10
Carin Smith

Cape Town - The price of petrol could go up by as much as R2 per litre in April, warned Dawie Roodt, economist of the Efficient Group.

The department of energy is set to announce the fuel price adjustment for April next week Friday.

"Taxes and a higher road accident levy will add 81 cents to petrol, while a (mostly) weaker rand could add as much as a rand. In total petrol could, therefore, go up by as much as R2 per litre. The good times lasted too briefly," Roodt told Fin24 on Tuesday.

"The huge stimulus to the economy due to the massive fall in the price of oil is now expected only to be a smallish boost. Blame the weaker rand for this, while the minister of finance simply couldn’t miss the opportunity to fill the state’s rather empty coffers."

READ: Petrol price hike puts pinch on pockets

Jana van Deventer, an economist at ETM Analytics, told Fin24 it is worth revisiting changes in the under-recovery in the basic fuel price (BFP) witnessed since the beginning of March.

"According to the daily fuel price details provided by the CEF group, movements in international product prices have contributed 79c/l to the average under recovery in the BFP in the two weeks through March 13, while oscillations in the dollar/rand exchange rate have resulted in an additional 19c/l under recovery through this period," said Van Deventer.

"A combined 98c/l average under recovery in conjunction with the 80.5c/l hike in the fuel and road accident fund levies, which will take effect in April, suggest that the price of 95 Reef petrol could increase by as much as R1.79c/l next month to R13.06/l."

READ: Fuel price could go up by close to R1 per litre

Such a fuel price increase would mark the single largest monthly price hike on in-house records (dating back to 1999), and is bound to reverse some of the reprieve felt by consumers in prior months, she pointed out.

"A stabilisation in oil prices and a sell-off in the rand are rapidly reversing the steep declines in the petrol price witnessed in recent months," she said.

"Nonetheless, from an inflation perspective, fuel prices are expected to continue to provide some relief to headline CPI as fuel prices will still be 9.2% lower relative to a year earlier in April should a R1.79c/l increase occur, meaning the fuel component in CPI would detract 0.52 percentage points off the headline reading."

ALSO READ: Consumers have never had it this good - expert

dawie roodt  |  sa economy  |  fuel  |  petrol price
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