Petrol price increases expected for South Africa this Wednesday

Fuel prices in South Africa are expected to rise across the board this Wednesday, 7 February.

Petrol is shaping up for an increase of up to 75c per litre, while diesel could go up by a maximum of 73c per litre, according to fuel-price data released by the Central Energy Fund (CEF).

These anticipated price hikes are a result of rising international oil prices during the month of January coupled with a deteriorating rand/US dollar exchange rate.

Oil started the year around the $76/barrel mark and rose to $83.55/barrel by the 26th of January, but it has since come down to around $78/barrel again – these fluctuations resulting in an under-recovery in local fuel prices of between 63c to 69c per litre, depending on the type.

Compounding these effects is an underperforming local currency, which depreciated from an average of approximately R18.55/dollar on 1 January to R18.71/dollar on 1 February.

This tacked on an additional 7c per litre to all grades of petrol and diesel.

Taking into account these cost inputs, fuel prices in South Africa this Wednesday are expected to be adjusted as follows, according to the CEF:

• Petrol 93 – Increase of 72c a litre
• Petrol 95 – Increase of 75c a litre
• Diesel 0.05% – Increase of 70c a litre
• Diesel 0.005% – Increase of 73c a litre

It must be noted that these predictions are not the official changes that will be made by the Department of Energy next month, which may be higher or lower as they also take into account any potential changes in the Slate Levy, taxes, transport costs, or wholesale and retail margins.

D-day for fuel taxes in February

February hosts the finance minister’s annual budget statement, in which he announces if there will be any changes to fuel taxes in South Africa.

National Treasury is looking to raise R15 billion in additional taxes this year to make up for a deficit in GDP growth, but opinions are split on whether the minister will keep fuel levies as they are or increase them.

Consulting firm Deloitte’s Billy Joubert believes that higher fuel taxes will not materialise due to the current cost-of-living crisis facing many households in the country as the government would want to “keep money directly in the pockets of consumers.”

Joubert told BusinessTech that should there be an increase, it would probably be minimal as the R15 billion Treasury needs only represent a small portion of the total tax collected in the country.

Contrastingly, accounting firm Sage says motorists can expect higher fuel taxes to be on the cards for this year.

“For the past two years, the government has maintained the fuel levy at a consistent level to support individuals and businesses grappling with higher petrol and diesel prices,” said the company.

“However, this year, we will likely see an increase in line with inflation.”

The most recent inflation data showed a decrease from 5.5% in November to 5.1% in December, with inflation averaging 6.0% in 2023.

Therefore, should an inflation-based hike come through, motorists could expect to be paying in the region of 27c to 37c per litre more in fuel taxes come April.