The Automobile Association of South Africa advised that the expected fuel increase at the end of the month or early April will be extremely high.
“These increases will exacerbate the already dire financial positions of millions of South Africans, according to the Automobile Association (AA)”, read the statement.
The Association said that the ever-increasing cost of international petroleum together with the dipping Rand/US dollar exchange rate, contributed to the hike in the local fuel prices.
The price increase is based on the results of an unaudited mid-month fuel price data released by the Central Energy Fund.
“As things stand today, petrol is set for a 90 cents-a-litre rise, diesel for an increase of 66 cents, and illuminating paraffin an increase of 62 cents,” the AA says.
The AA also raised their concern around the serious impact the increase will have on the already floundering South African economy which is still struggling to recover from “including corruption, over-spending on the civil service, and the largest contraction in a century”.
In his February Budget, the Minister of finance announced that a 26 cents-a-litre increase to the General Fuel and Road Accident Fund levies (excluding the one-cent increase to Carbon Tax) will be implemented in April.
The forecasted fuel price increase does not take this levy increase into account.
The forecasted price increase and levy increase will take the petrol price to an additional R1.16 a litre and diesel by 92-cents.
According to the Association, “A litre of 95 ULP Inland (currently at R16,32/l) will now cost R17,48/l of which R6,10 will be taxed through the GFL and RAF. This means that at least 35% of the cost of a litre of this petrol will be taxed. The price of diesel (currently pegged at R14,12/l) will increase to R15,04 of which R5,96 (including increased levies) will be taxed – or at least 40% of the total cost.”
The Association said that if the Rand or international oil prices do make a quick reversal the situation could deteriorate further by the end of the month.
“The rampant upward march of international oil prices has quickened alarmingly in the first weeks of March. The basic fuel price for petrol, for instance, shot up from R6.55 a litre at the February close-out, to R7.40 a litre in the first two weeks of March. Over the same period, the average Rand/US dollar exchange rate weakened by about 30 cents,” noted the AA.
The AA said that the government can no longer ignore the knock-on effects of severe fuel price rises on the public.