Cape Town – South Africans can expect fuel prices to climb up to R24/l for petrol and R23.60 for diesel in April, the Automobile Association (AA) said on Thursday.
Commenting on mid-month fuel data released by the Central Energy Fund (CEF), AA said in a statement that it is predicting that the price of 95 octane could increase by R2.25 a litre, and diesel between R2.51 and R3.08 a litre.
“If realised at month-end, these will be the biggest increases to fuel prices in South Africa’s history and will, undoubtedly, have major ramifications for all consumers and the economy in general. We must note, though, that this is the mid-month outlook, and oil prices are, for the moment, see-sawing significantly so there may yet be some relief before the official adjustment by the Department of Mineral Resources and Energy is made going into April,” says the AA.
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AA further said that the main driver behind the increases is the movement in international oil prices which have soared to record levels in recent weeks because of the conflict in Ukraine and concerns over Russian oil supplies.
Russia is the world’s third-largest producer of crude oil and given its fallout with Ukraine oil prices have been soaring, according to News24.
Traders have been scrambling to secure oil supplies with Russia which has been unable to deliver some of its oils due to shipping and banking restrictions.
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Local fuel prices are determined by international oil prices, as well as the dollar-rand value, as South Africa buys oil in dollars.
Based on the current data, the rand’s value against the US dollar is having a nominal impact on the price of fuel locally, according to AA.
The increase to oil prices is contributing 98% to the predicted price hikes, with the rand contributing the other 2%.
“We are seeing record fuel prices around the world as the high oil prices exact their toll in every market. Locally there is little to cushion the blow for millions of South Africans who are struggling to cope with a fragile economy which is hurting their personal financial situation. Consumers should brace themselves and prepare for what is likely to be a long winter if the conflict in Ukraine is drawn out,” said the AA.
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Compiled by Sinothando Siyolo
