Fuel prices set to increase again in August — AA

South Africans can expect another increase in the price of petrol, diesel and illuminating paraffin in August, the Automobile Association (AA) warned on Monday.

The association said that current data from the Central Energy Fund suggests a price rise of 19 cents a litre for petrol, 13 cents for diesel, and 22 cents for illuminating paraffin.

It was commenting on unaudited mid-month fuel price data released by the fund.

This would increase the petrol price to R16.21 a litre inland, and R15.72 on the coast.

Further volatility

If the prevailing rand and fuel price trends persist for the rest of July, the AA says that the fuel price increase may be lower, but it cannot rule out the possibility of further volatility.

“International oil prices see-sawed during the first half of July, but remained within a fairly narrow band, and did not contribute substantially to the price rises we are anticipating for next month,” the AA explained.

“The big news is again on the rand front. The local currency started this month with a deficit thanks to several days of losses against the US dollar at the end of June. However, the rand clawed back some of these losses during a period of unusually flat trading in the first half of June.”

The rand was trading at R13.20/$ on Monday morning.

The AA said that fuel price spike was impacting on the lives of all South Africans, especially the poorest of the poor who rely on paraffin for heating, lighting and cooking.

READ MORE: Ramaphosa downplays hope of a quick fix for cost of high fuel, VAT

“The increases have brought the issue of fuel costs firmly into the public domain, and we believe now is a good opportunity for government to revisit the issue of the fuel levies with a view to reducing them significantly, especially as this is a cost it has control over,” said the AA.

Breakdown: Why is petrol so pricey?

President Cyril Ramaphosa has given ministers in the economic cluster a two-week deadline to come up with measures to ease the burden of high fuel prices and the VAT hike on already struggling consumers.

However, he was careful not to raise hopes of a quick solution, indicating that government’s options were limited.

At the beginning of July, the inland price for a litre of 95 octane unleaded petrol went up to R16.02. The coastal price went up to R15.43. Both grades of petrol, 93 and 95 (ULP & LRP), increased by 26 cents and 23c a litre respectively at the time.

Diesel 0.05% sulphur and diesel 0.005% sulphur increased by 26c and 24c a litre respectively at the beginning of July, while illuminating paraffin (wholesale) went up by 22c and illuminating paraffin (SMNRP) went up by 30c. The maximum retail price for LPGAS spiked by 37c per kilogram at the beginning of July. — Fin24

Carin Smith
Carin Smith
A business journalist at Fin24.com.
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