The petrol price decrease honeymoon seems to have come to an abrupt end. On Wednesday the fuel prices are set to increase and for motorists outside the Northern Cape, the escalation of toll fees will also be effected this month. It is expected that another fuel price is awaiting motorists around the corner in April when the fuel levy and road accident fund levy increase kicks in. The exact pricing has not yet been confirmed by the Department of Energy, but the Automobile Association (AA) indicated that petrol will increase by approximately 73c a litre, diesel 92c a litre and illuminating paraffin by 74c a litre.
“The Rand/US dollar exchange rate has worked slightly in South Africa’s favour during February, giving savings of up to nine cents a litre. However, this has been shouldered aside by fuel price rises which have come off their January plateau and advanced considerably,” the Association stated.
An additional carbon tax will also come into effect in June and will add another 9c per litre for petrol and 10c a litre for diesel to the already astronomical cost of fuel.
The petrol price in South Africa is linked to the price of crude oil in international markets and is quoted in US dollars (US$) per barrel. International petrol prices are essentially driven by supply and demand for product in a particular market. Crude oil prices combined with the Rand/Dollar exchange rate therefore have a major impact on petrol prices.
The toll fees adjustment of 4, 8 %( average) has been implemented on 1 March and will be an added burden for motorists and logistical companies. Ultimately the consumer will bear the brunt of the increases due to road freight being the main link between producers, manufacturers and the consumer.