The Automobile Association (AA) says petrol may increase by 56 cents a litre at the end of April, which is cause for concern given current economic conditions. If the increase materialises, it will be the third straight increase to fuel prices this year.
Unexpectedly strong international fuel prices are to blame for the anticipated hike, the AA said, commenting on unaudited mid-month fuel price data released by the Central Energy Fund.
“The international product price of diesel climbed somewhat in the first half of April, while petrol has made a substantial jump,” the AA says.
By contrast, diesel is showing a reduction of five cents and illuminating paraffin down by a cent.
“Diesel’s smaller increase is likely due to variations in international refining capacity, as well as the approaching end of the northern hemisphere winter when demand for diesel fuels for use in peaking power plants and as a heating fuel diminishes,” the AA points out.
The Association says that the Rand has appreciated quite strongly against the US dollar since the end of March, with the daily exchange rate used for fuel price calculations rising from over R14.60 to the dollar on 31 March to under R14 currently.
“The ground gained by the local currency has cushioned some of the blow, with diesel currently showing a slight decrease. Price stability in illuminating paraffin is welcome as South Africa heads into its own winter, during which many households will be using paraffin as a heating fuel,” the AA concludes.