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Thursday / 20 June 2024
HomeFeaturesWhat to expect from petrol prices in South Africa this Wednesday

What to expect from petrol prices in South Africa this Wednesday

South African motorists should prepare for more pain at the petrol pumps this March.

Mid-month fuel price data released by the Central Energy Fund (CEF) indicates that prices for both petrol and diesel are expected to rise by at least R1.05/litre on Wednesday.

This follows a poor performance of the rand against the US dollar last month, coupled with a rise in international oil costs.

The rand/US dollar exchange rate started February at around R18.75/dollar and ended it at R19.19/dollar, subsequently adding anywhere between 17-19c/litre to the cost of fuel in South Africa.

This underperformance was exacerbated by a rise in international oil prices. On 1 February, Brent Crude traded at $78.70/barrel, rising to a substantial $83.62/barrel by the 29th.

This led to an under-recovery in local fuel prices of between 99-103c/litre for petrol and 87-99c/litre for diesel.

With these elements included, fuel prices in South Africa on Wednesday are expected to be adjusted as follows, according to the CEF:

  • Petrol 93 – Increase of R1.16 a litre
  • Petrol 95 – Increase of R1.20 a litre
  • Diesel 0.05% – Increase of R1.05 a litre
  • Diesel 0.005% – Increase of R1.18 a litre

It must be noted that these predictions are not the official changes that will be made by the Department of Energy this week, 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.

Fuel tax changes for April

In his annual budget speech in February, finance minister Enoch Godongwana announced that there will be no changes to the country’s General Fuel Levy (GFL) and Road Accident Fund (RAF) Levy for 2024.

The minister referenced the current cost-of-living crisis as the motivation for government to halt rate hikes for the year on the two biggest levies imposed on fuels in South Africa, and he estimates that doing so will bring tax relief to the tune of R4 billion for local motorists.

However, he said the Carbon Fuel Levy – which is included as an add-on to the GFL – will increase from 10c/litre to 11c/litre for petrol, and from 11c/litre to 14c/litre for diesel.

These alterations will take effect in April when the new financial year kicks off.

While the GFL and RAF Levy are being kept static for now, the Organisation Undoing Tax Abuse (Outa) believes that they will probably be increased later this year in the minister’s Medium-Term Budget Policy Statement.

Speaking to MyBroadband, Outa said that it does not believe that tax halts will last until 2025 because the government does not have the budget to continue supporting motorists in this way, and the GFL and RAF Levy are two of the easiest taxes to collect.

“Outa is of the opinion that this is an election year, and as such the budget was an election budget but due to the fiscal constraints SA’s budget is facing, [the taxes] will probably increase in the [medium-term budget],” it said.

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