Petrol up, diesel down in May
South African fuel prices have reached recordhigh increases over the past three years despite the government not increasing the general fuel levy or Road Accident Fund (RAF) levy.
Commenting on unaudited data from the Central Energy Fund (CEF), the Automobile Association (AA) says unleaded 93 petrol inland cost R21,51 per litre in May 2022 and increased to R23,01 in May 2023.
According to current data from the CEF, this price will again increase by 37c/litre in May, pushing the price close to R25,15/l.
The outlook for unleaded 95 inland is not much better, with the CEF data showing an increase of 38c/l.
This will push the price of this fuel to around R25,50/l, higher than the R25,42 in August 2022, but not quite the record price of R26,74 in July of that year.
Diesel is set to decrease by 35c/l while illuminating paraffin is also set to come down by 28c/l.
“The decrease in diesel prices is especially welcome as it will not result in higher input costs across various sectors, and this won’t be a driving factor in consumer prices increasing,” notes the AA.
A review of the data shows that the expected increases are a result of fluctuations in international product prices that took a sharp upward trajectory at the beginning of the month.
The relative stability of the Rand against the US Dollar in the early part of the month contributes only a small margin to the expected increases.
The AA noted that with tensions ramping up in the Middle East, the local currency could be under significant pressure and could have a more significant impact on local fuel prices in May.
"It’s important to keep an eye on that indicator as we head into the new month,” notes the AA.
Expected increases reaffirm its belief that a review of the fuel price structure is necessary to establish if any components within the current pricing model can be revised by the Department of Mineral Resources and Energy (DMRE) to mitigate against rising costs, the AA stated.