Petrol, diesel prices to jump in May

South African petrol pump prices and wholesale diesel prices will rise sharply next week, the government said on Wednesday, adding to inflationary pressures.

The Department of Minerals and Energy Affairs said all grades of petrol would on May 7 rise by 55 cents, or 6,2%, to R9,46 a litre in Gauteng.

The wholesale price of 0,05% sulphur content diesel would rise by 71 cents to R10,09 a litre.

Fuel prices are adjusted monthly on changes in the rand currency and international oil prices, which increased during April, although the May adjustments included an annual increase in a number of government levies.

Rising fuel and food prices have been the main drivers of higher CPIX consumer inflation, which soared to a more than five-year high of 10,1% year-on-year in March, racing away from the central bank’s 3% to 6% target.

Fuel costs make up about 4,7% of the main CPIX index targeted by the central bank for monetary policy, but the indirect impact is far larger.

According to analyst from ETM, George Glynos, the increase is higher than expected due to a 25 cents increase in the slate levy.

“This may have caught some people by surprise,” he said.

“The under-recovery was in line with our forecast of 30 cents,” he said. - Reuters, I-Net Bridge

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