Data from the Central Energy Fund (CEF) shows that South African petrol prices will possibly rise beyond R23 per litre in May 2023, a first for this year. Read further about all the implications.1
The financial impact on households
According to the Automobile Association (AA), petrol price increases further debilitate consumers’ spending power while they are battling serious food inflation on another front. Fortunately, the April 2023 article by TopAuto indicates that diesel prices may decrease by a sizeable 57 cents per litre on 25 May. 1
Diesel’s crucial role in the South African economy
Because diesel fuel is a critical resource used in the manufacturing, mining, and agricultural sectors, any price increase immediately impacts the cost of basic commodities. 1
The current financial scenario affects consumers
Consumers already face a 14-year high of 14.4% in food inflation and a rise in the consumer price index (cpi) to 7.1 % in March 2023. Therefore, any increase in diesel prices would have been too much for many. According to the CEF, the projected price of diesel (0.005%) may decrease by 57 cents per litre. In contrast, the projected cost of 93 octane petrol could increase by 56 cents per litre. 1
What is causing the fuel price increase?
Persistently high international petrol product prices during April are the leading cause for the South African petrol price increases expected in May. On the other hand, a marked decrease in the international diesel price during April caused a reduction in the South African diesel price. 1
The average rand/dollar exchange rate helped consumers
The rand traded on average at about R17.80 to the dollar on 31 March, increasing to R18.21 by 25 April. This caused an over-recovery of 11 to 12 cents per litre for all grades of both petrol and diesel. 1
Some good news
It is not all bad news. There is some relief in the future. It is reported that the petrol price could drop by as much as 97 cents per litre, and the diesel price might decrease by R1.05 in June 2023. Let’s hope that the fuel price falling is an ongoing trend and that the fuel price doesn’t go over R23 per litre in the future. 2
Disclaimer
This article aims to inform South African consumers that petrol prices could pass R23 per litre. 1
In this challenging economic climate, motorists are searching for excellent car insurance at affordable prices. Contact us at Prime South and experience our world-class client service, while you discover more about our affordable car insurance products. These include comprehensive and customised car insurance with fixed premiums* and reducing excess*. Comprehensive or customised car insurance applies to cars not older than 15 years, but age is not an issue with our third-party PLUS car insurance. T’s and C’s apply.
Consult a financial advisor for professional advice to make sure you purchase the correct financial services product.
Sources:
