Expected petrol price increases for June – Up to R3.48 per litre

Data from the Central Energy Fund (CEF) taken between 1-13 May points to huge fuel price increases that will hit South Africa in June.

The data shows that petrol prices could increase by as much as R1.98 per litre, while diesel prices could rise by up to R1.63 per litre, reported BusinessTech.

According to the CEF, the expected price adjustments for all types of fuel in South Africa in June are as follows:

• Petrol 93 – Increase of 193 cents per litre
• Petrol 95 –Increase of 198 cents per litre
• Diesel 0.05% – Increase of 163 cents per litre
• Diesel 0.005% – Increase of 160 cents per litre
• Illuminating Paraffin – Increase of 215 cents per litre

However, these increases do not consider the “tax holiday” on fuels which is scheduled to lapse at the end of May.

The tax holiday saw the General Fuel Levy on all fuel types reduced by R1.50 per litre over the past two months.

If the government does not extend the tax holiday or implement additional measures to curb the price hikes before June, South Africans could see fuel prices soar to the tune of R3.48 per litre for petrol and R3.13 per litre for diesel.

On the bright side, these figures do not take into account the whole month’s data, such as potential retail margin changes and adjustments to the Slate Levy.

Therefore, the official adjustments that will take place next month could differ significantly.

Factors affecting the fuel price

South African fuel prices are mostly affected by the rand/US dollar exchange rate and international petroleum prices, which are mainly determined by oil prices.

At mid-May, the weakening local currency contributed around R1.00 to the rising fuel prices, after shooting from under R15-per-dollar in April to over R16-per-dollar in May.

Similarly, oil prices have rallied over the past few months and found stability around the $110-per-barrel mark. Thus far, this has contributed another R1.00-per-litre for June’s price increases.

The negative effect of increasing oil prices is expected to last for some time to come, as the European Union is looking at ways to impose sanctions on Russian-produced oil which will likely exacerbate the increases.