Huge petrol price increase looms

By Myles Illidge for MyBroadband

East Cape Fuels has revealed its estimated mid-month fuel price adjustment for March 2022, and it’s bad news at the pumps, with a considerable price hike projected for all grades of petrol, diesel, and paraffin.

Drivers of petrol will see unleaded 93 and 95 climb R1.23 and R1.24 per litre, respectively.

However, diesel vehicle owners will be hit the hardest once again, as they can expect 50ppm diesel to increase R1.37 per litre.

The price changes are as follows:

  • 93 unleaded petrol — R1.23 increase
  • 95 unleaded petrol — R1.24 increase
  • 50ppm diesel — R1.37 increase
  • Illuminating paraffin — R1.31 increase

East Cape Fuels is a petroleum supplier that provides mid-month price estimates. While it has often underestimated the actual price increase, it has rarely overestimated it.

With these estimated increases, unleaded 93 and 95 will cost R21.12 and R21.38 per litre, respectively.

The price of diesel will rise to R19.44 per litre.

These price increases could have a cascading effect in South Africa.

According to the programme coordinator for the Pietermaritzburg Economic Justice and Dignity Group, Mervyn Abrahams, the fuel price increases experienced in 2021 had already hiked food costs by 8.6%.

One development that could help motorists at the pumps, BusinessTech reported, is that this year could see a shift in trends regarding fuel taxes.

BNP Paribas South Africa senior economist Jeff Schultz explained that finance minister Enoch Godongwana’s assertion that fuel prices should be re-assessed could mean fuel taxes won’t rise sharply.

“Fuel and road accident fund levies have historically seen above-CPI increases,” Schultz said.

“However, this time could prove different given finance minister Godongwana’s assertion that the structure of South Africa’s fuel price should be re-assessed as consumers are grappling with record fuel prices and taxes and levies currently accounting for a third of domestic fuel costs.”

“Any decision will have to be carefully considered, though, given the general fuel levy alone brings in more than 1% of GDP in annual revenues, while the road accident fund has a growing claims backlog,” he adds.

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