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SA motorists to cough up for oil price spike - AA

Apr 16 2018 14:18

Cape Town - South African motorists can expect sharp increases in fuel prices at the end of April, the Automobile Association (AA) said on Monday.

The organisation commented on unaudited mid-month data released by the Central Energy Fund.

Petrol is set for an increase of 41 cents a litre, diesel 48c and illuminating paraffin 38c at the beginning of May. The AA pointed out that the predicted increase in May comes on the back of a 72c increase at the beginning of April. Therefore, if the predicted increases for May materialise, fuel prices would have increased by more than one rand in the space of two months.

At the beginning of April the fuel levy and Road Accident Fund levy increases announced in Budget 2018 kicked in. The price of 95 unleaded and leaded petrol in Gauteng increased in April by 72c/l and at the coast 62c/l. The per litre pump price of 93 unleaded and leaded petrol increased by 69c/l in Gauteng and 59c/l at the coast. Diesel prices went up 65.20c/l in Gauteng and 55.10c/l at the coast.
 
The rand weakened slightly against the dollar in the first half of April, but the AA pointed out that the spike in international petroleum prices accounts for nearly the entire increase in fuel prices predicted by the mid-month data. In all of the predicted increases, the movement in the exchange rate accounts for just 4c of the rise, in the view of the AA.

"Petroleum prices were largely flat in the first week of April, but spiked sharply as tensions escalated in Syria," said the AA.

"The Middle East lies near many of the world's key oil producers and petroleum prices have historically been sensitive to instability in the region."

The AA pointed out that prolonged instability in the Middle East could drive international petroleum prices even higher.

"Several foreign powers have now taken a position in the Syrian civil war. If tensions escalate, or the war itself drags out even further, the outlook for oil prices would become more negative," said the AA.

"South Africans should be aware that their fuel budgets might come under renewed strain in the short to medium term."

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