Bad news for December, as petrol price expected to see another hefty hike

With the December festive season around the corner, travellers may see petrol prices go up for the last month of the year.

According to the data from the Central Energy Fund (CEF), 93 unleaded petrol (UPL) could increase by due 97 cents per litre while 95 UPL may rise by R1.09 per litre.

The price of diesel, however, could decrease by 34 cents per litre.

In addition, illuminating paraffin is also expected to increase by around 30 cents per litre.

Prices likely to change

The current price of 93 and 97 petrol inland stands at R22.57 and R22.87 per litre respectively.

For coastal areas, 93 UPL costs R21.92, while 95 UPL is R22.22 per litre.

International prices of petroleum products, driven mainly by oil prices, and the rand/dollar exchange rate used to purchase these products are the main drivers of fuel prices.

The Rand is performing stronger against the US Dollar in daily trading, according to CEF’s data, thus having a positive impact on fuel prices.

The Association Automobile (AA) noted the expected petrol price hike.

“With these expected increases to petrol, the price of a litre of 95 ULP, for instance, will climb to just under R24 per litre which will be way below the high of R26.74 per litre seen in July, but which will still be higher than September, October and November prices,” the AA said in a statement on Tuesday.

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“The decrease to diesel is, of course, welcome and should, at least, not immediately negatively impact other prices reliant on diesel as an input cost. Of course, the increase to illuminating paraffin remains a concern as it will affect the poor most.”

The association, however, warned the predicted prices may change before the final adjustment for December is confirmed by the Department of Mineral Resources and Energy.

“Increases to petrol prices are almost certain to happen while decreases to diesel are also almost a certainty. Given that many people will be travelling by vehicle in December, we advise motorists to carefully plan their budgets now to ensure they have the necessary funds to cover their expenses, which may also include toll fees on certain routes.”

Deregulation

The process of deregulating the price of 93 octane petrol in South Africa is currently underway after the move gazetted by Mineral Resources Minister Gwede Mantashe in July.

Government previously indicated its intention on the matter, saying the deregulation plans would only occur once the Treasury figures out how to recover the R90 billion loss from the fiscus it would see if fuel taxes were removed in one go.

Finance Minister Enoch Godongwana revealed that there were many options on the table to achieve this, such as additional taxes on motor licence renewal fees to fund the Road Accident Fund (RAF).

There had been talks of the RAF levy being scrapped from the fuel levy and moving elsewhere, which has been backed by Parliament’s Portfolio Committee on Mineral Resources and Energy.

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