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AA revises fuel price hike prediction

Apr 26 2018 15:30

Cape Town - Fuel prices are likely to increase by about 49 cents a litre on May 2 and not by 92c as predicted earlier by the Automobile Association (AA).

The AA said in a statement on Thursday that the error in its prediction occurred due to the Department of Energy closing off the reporting period for fuel increases earlier than usual.
 
The AA were initially commenting on unaudited month-end fuel price data released by the Central Energy Fund (CEF) - based on figures provided up to Wednesday 25 April. According to these figures, the under-recovery - and therefore the predicted increase at the pumps - of the fuel price was 92c a litre.
 
However, the Department of Energy has based its new fuel price for May on the figures of Tuesday 24 April, which indicate an increase of 49c a litre for petrol, 60c for diesel, and 52c for illuminating paraffin, according to the AA.

Based on these figures, a litre of 93 octane unleaded petrol (inland) – which currently costs R14.23 a litre – will now cost R14.72. This is 23c higher than the previous record high of R14.49 in December last year.  
 
“Even with the revised data, these increases are significant and are attributable to a weakening rand against the dollar, and increasing international petroleum prices," the AA said.

"We remain concerned about the increases, especially those to illuminating paraffin. Users of this fuel will be hit particularly hard as we head into the colder months where many households use this fuel for lighting, heating and cooking.”
 
The AA said it should be noted that, despite this earlier closing off of the reporting period, the depreciation of the rand over the past few days will impact on future fuel prices.
 
“Going into May, there is already an under-recovery of 46c a litre. If the rand doesn’t appreciate significantly against the dollar, and if international (oil) prices don’t decrease, this will mean another increase in June,” cautioned the AA.

It said the revised predicted price increases must also be seen against the backdrop of the substantial increases to fuel prices in April, which saw the addition of 52c a litre being added for the general fuel and Road Accident Fund levies.

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