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Cape Town - Upcoming fuel increases in April will likely push the price of petrol closer to its December all-time high of R14.49 per litre (93 octane) and R14.76/litre (95 octane) inland and R13.76/litre at the coast, the Automobile Association (AA) said on Wednesday.
Commenting on unaudited month-end fuel price data released by the Central Energy Fund, the AA warned that any further increases in international petroleum prices in the near future could cause domestic fuel prices to quickly reach even further highs.
It explained that, apart from the impact of higher international petroleum prices, the local fuel price is set for a steep hike as higher fuel levies kick in.
International petroleum product prices have remained stable since mid-February, but have climbed sharply since March 12. That is why the AA is anticipating an increase of about 63 cents a litre for petrol and 57c/litre for diesel. Illuminating paraffin, which is not affected by the levy increases, is expected to decrease by around 4c/litre.
The AA also pointed out that the rand/dollar exchange rate has remained stable over the same period, meaning that most fuel prices would have increased even without the additional taxes announced in February's budget.
The general fuel levy and Road Accident Fund levy will go up in April by a combined 52c/litre, meaning substantial price increases at the pumps.
According to the AA, these increases will push the total amount of taxes paid to the levies to R5.30/litre (from R4.78). This means that around 40% of every litre of petrol is being paid to indirect taxes via fuel purchases.
The association expects that, because of the steep expected hikes, public transport providers such as taxis and buses would have to pass these on directly to consumers. Similarly, the cost of the shipment of goods around the country will also rise as producers, suppliers and freight companies are forced to recover costs through increased prices.
"All of this must be seen against the backdrop of the increase in value-added tax from 14% to 15%, which also kicks in in April," said the AA.
"The good news, however, is that Moody’s’ decision to hold its current rating and change its outlook to 'stable' gives South Africa much-needed breathing space to address economic issues. We are hopeful increased political and economic stability will spill over into a more stable outlook for fuel prices."
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