South Africa will be hit by yet another hefty petrol price
increase in May, marking the fourth consecutive fuel hike in 2019.
The Central Energy Fund (CEF) has released its latest report on fuel concerns and, unfortunately for South African motorists and general consumers alike, the news is grim. Earlier this month we reported that, due to a number of compounding factors, the cost of fuel would increase by an estimated 55 cents per litre in May.
Mid-month estimates leave a lot of room for ever-changing
variables and, as such, are generally regarded as considered guestimates,
rather than official proclamations. In this case, however, the mid-month data
released by the CEF correlates directly to the organisation’s latest report; a
report which is almost guaranteed, sans governmental intervention, to reflect
the costly reality of pump prices in May.
Reasons for the upcoming petrol price increase
The ebb and flow of petrol price increases rely on two fundamental
and interlinked variables; the international cost of crude oil and the strength
or weakness of local currency. Both of these factors have left South African
motorists in a spot of bother.
April has proven to be a particularly frustrating month for
the rand. The currency started the month off at R14.19 to the US dollar and,
despite maintaining and even strengthening towards the middle of the month,
currently sits uncomfortably at R14.39.
The dollar price of Brent Crude oil also increased sharply in
April – resulting in a dreaded double whammy for developing nations with
minimal reserves. On 1 April, a barrel of Brent Crude oil was trading at $69.01,
22 days later it was trading at $74.57. While prices have settled at around $73,
the damage, at least to South African motorists, has already been done.
Here’s what petrol will cost you in May
|Fuel||April Price||May Price|
Interestingly enough, the rand’s downturn is less severe than that of other nations’ currencies. As a result, South African motorists will be spared the full brunt of a 70 cents per litre increase. Still, fuel hikes, across the board, are expected as follows:
- Price of petrol per litre will increase by between 53 and 55 cents
- Price of diesel will remain flat
- Price of illuminating paraffin will increase by 3 cents