Steady appreciation in international petroleum prices during April has brushed aside gains in the rand/dollar exchange rate, setting the stage for more fuel price hikes in May, the Automobile Association (AA) cautioned on Thursday.
This view is based on unaudited month-end fuel price data released by the Central Energy Fund (CEF).
“The exchange rate showed a creditable strengthening during April,” the AA said. “With a flat oil price, consumers could have expected the price of fuel to drop by up to 29c/l.”
The recent increase in international product prices means that diesel will only drop by 3-4c/l, with a 9c/l drop on the cards for illuminating paraffin, in its view.
However, a 42c/l increase in the landed price of petrol considerably outstripped the exchange rate’s strength, meaning petrol users will have to fork out an extra 12c/l.
“International petroleum prices have settled into a pattern of gains which are not always being overcome by recent rand strength against the dollar,” the AA explained.
“We forecast steady rises in the price of fuel in South Africa in the short to medium term, with the possibility of larger spikes if the rand comes under pressure.”
In April, the cost of a litre of 93 unleaded petrol inland went up to R12,32/l and R11,94/l at the coast. For 95 unleaded, motorists fork out R12,62/l and R12,14/l at the reef and coast respectively.
Diesel rose by 98c/l, illuminating paraffin by 76c/l and liquefied petroleum gas by R1,10/kg.
Last month’s price hike also included a 30c/l increase in the general fuel levy, as well as adjustments in transportation costs following the National Energy Regulator of South Africa’s approved pipeline tariff increase and the road transportation tariff hike obtained from the Road Freight Association.
