Fuel Price: Good News For Diesel, But No Joy Ride For Petrol Heads In May
Petrol prices in South Africa are projected to rise next week, but diesel costs are expected to fall. Despite the instability of the Rand and international oil prices, a little over-recovery in gas prices is projected to result in an increase at petrol stations starting next Wednesday. However, if the over-recovery continues, the increase of 60 cents a litre for 95 Unleaded and 65 cents for 93 Unleaded might be reduced to between 40 and 50 cents. Meanwhile, diesel prices for 50ppm and 500ppm will fall between 28 and 54 cents per litre.
Fuel costs are regulated by the Rand/Dollar exchange rate and worldwide oil prices. While worldwide oil prices have risen to $81 per barrel, the Rand has remained unstable, trading above R18 to the US dollar. The DOE has previously indicated that the daily CEF snapshots are not predictive and do not account for other potential changes such as slate levy adjustments or retail margin changes that could alter gasoline prices.
The predicted rise in petrol prices will strain consumers’ already stressed budgets as they battle with record-high food inflation and a 7.1% spike in the consumer price index in March. However, the anticipated fuel price decreases are welcome news, particularly for large industries such as agriculture, mining, and manufacturing, where diesel is a considerable input cost. The DOE is expected to make an official announcement regarding the change of fuel prices in the following days, with the officially adjusted fuel prices set to take effect on May 3.