Already cash-strapped consumers have been urged to monitor their fuel consumption as an anticipated fuel price increase will knock budgets following a three-month reprieve.
This comes as current unaudited fuel data from the Central Energy Fund (CEF) shows significant increases for all grades of fuel this month.
According to the data, 93ULP and 95ULP petrol are expected to climb by between 64 cents a litre and 66c/litre respectively, while diesel is expected to increase by around 63c/litre. Illuminating paraffin is expected to be 47c/litre more.
The AA said the short-lived relief South African motorists enjoyed in the past three months was over.
“The increases to the prices of petrol will have a negative impact on household budgets at this early part of the year while most consumers are still recovering from festive season spending and stretched budgets.
The cumulative effect on personal finances will be a further reduction of disposable income which will be exacerbated by increases to goods and services which must recoup the higher fuel input costs.
“We urge consumers to monitor their fuel usage carefully, and to budget according to the new fuel prices. Ensuring vehicles are well maintained and in good mechanical condition, carefully planning routes, and avoiding heavy traffic, if possible, are some ways in which motorists can ensure better fuel consumption,” the AA said.
Senior economist Geoffrey Nölting added that load shedding has resulted in many businesses and households relying on diesel generators.
“This is further impacted by dysfunctional rail transport which has meant that many of our goods have to be transported by road freight, which often requires more fuel than rail per ton. The additional demand due to these structural inefficiencies consequently also puts upward pressure on domestic fuel prices,” said Nölting.
Chief executive of the Fuel Retailers Association (FRA), Reggie Sibiya, said South Africans had enjoyed a period of price decreases mainly driven by European markets.
“After the Russia-Ukraine conflict EU sanctions, Europe got its oil supplies mainly from the Middle East via the Suez Canal in the Red Sea. The recent geopolitical conflict around the Red Sea coupled with increasing demand for Middle East oil by China had some influence on increasing oil prices.
“The current price estimate is sitting around 75c per litre increase for this month price change and would likely be much higher at the next month price change if the going rate sustains as we are still well in the beginning of the (new pricing) period” said Sibiya.
Road Freight Association (RFA) chief executive Gavin Kelly said as with all increases introduced into the logistics chain, there will be a similar effect on the consumer once the ripple effect through the supply chain has begun.
“Unfortunately, whether we like it or not, there will be increases in the transport of goods (and passengers) which we will feel rather sooner than later. We have seen a decrease in the last two months of 2023 and January 2024, so this will be the first of a possible set of increases should the situations in Ukraine and the Middle East not be amicably resolved.
The increase will be around 1.8% – but that is not necessarily what will be felt by consumers in the retail market.”
Cape Times