logo
Latest News
Follow
Friday / 24 May 2024
HomeNewsMixed outlook for petrol prices in South Africa in April – More good than bad

Mixed outlook for petrol prices in South Africa in April – More good than bad

Mid-month fuel price data indicates that petrol prices could see another increase next month while diesel prices could be in for a welcome drop.

These expected changes, as published by the Central Energy Fund (CEF), are based on the performance of the rand/US dollar exchange rate and international oil prices from the first to the 13th of March.

During this period, the rand gained purchasing power against the dollar, swapping hands at an average of R19.25/dollar on the first and dropping to R18.68/dollar by the 13th.

Consequently, it contributed to an over-recovery in local fuel costs of between 11-12c/litre, depending on the grade.

Increasing international oil prices, meanwhile, had a mixed impact on next month’s expected fuel price adjustments.

Over the past two weeks, the cost of Brent Crude oil rose from $83.55/barrel to over $85.30/barrel, in turn contributing to an under-recovery of between 22-24c/litre for petrol, but an over-recovery of 16-20c/litre for diesel.

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

  • Petrol 93 – Increase of 11c a litre
  • Petrol 95 – Increase of 13c a litre
  • Diesel 0.05% – Decrease of 28c a litre
  • Diesel 0.005% – Decrease of 32c 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 said the rising cost of living in the country led to government halting rate hikes for the year on the two biggest fuel levies, and he estimates that doing so will bring tax relief for local motorists to the tune of R4 billion.

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 at the start of the next financial year in April.

While the GFL and RAF Levy are being kept static for now, the Organisation Undoing Tax Abuse (Outa) believes that they will likely be hiked post-elections during 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.

Show comments