Petrol price April 2017: AA predicts fuel price decreases even after fuel levy increases

MARCH 28, 2017
Petrol price April 2017: AA predicts fuel price decreases even after fuel levy increases

If predictions by the Automobile Association (AA) of South Africa are anything to go by, fuel prices for April 2017 will be lower than in March - even after adding in the 39 cents a litre increase in fuel taxes, which take effect at month-end. 

In March, the retail price of both 93 and 95 octane petrol decreased by 8c a litre, while the price of diesel also decreased by 2c a litre and the wholesale price of illuminating paraffin decreased by 8c a litre. LP gas cost 2c less  per kilogram.

From the 1st of April 2017, the fuel levy will increase by 30 cents per litre, while the Road Accident Fund (RAF) levy will increase by 9 cents.

Commenting on unaudited month-end fuel price data released by the Central Energy Fund, the AA said that; "International petroleum prices continued to ease during March on the back of increased global oil stocks which have mostly blunted OPEC’s recent production restrictions.

“Over the same period, the rand performed strongly against the US dollar, notwithstanding recent events.”

According to the Association, even after adding in the fuel tax hikes, petrol will drop by around 24 cents a litre, diesel by nine cents, and illuminating paraffin by 10 cents.

“However, the last day’s developments have shown that uncertainty persists around key political figures in the Ministry of Finance.

“In our view, the Presidency was ill-advised to call off the Treasury’s international roadshow at such short notice with so little detail given. The resultant sharp weakening of the Rand again demonstrates the importance of political and fiscal stability to investors,” the AA said.

It said that any further political shocks which weakened the Rand would directly result in increased transport costs, as well as higher domestic costs for those who use paraffin for heating, cooking and lighting.

"Lower-income citizens are disproportionately affected by fuel price hikes arising from Rand weakness. The government's lack of sensitivity towards investor risk appetite is directly contributing to increased hardship for the poor,” the Association concluded.