Fuel: R2 hike in April

2015-03-11 00:00

THIS is no April Fools’ Day joke: On April 1 the price of petrol looks set to go back up by R2 per litre and that of diesel by about R1,50 per litre.

This is due to a sharp weakening of the rand in recent weeks, an increase in the price of Brent crude from last year’s unexpected low rates, and higher taxes.

Finance Minister Nhlanhla Nene announced on February 28 that motorists must budget to pay an extra 80,5 cents in fuel levies on each litre of fuel sold.

On top of this, the Central Energy Fund yesterday said the under-recovery in the price paid for 95 octane petrol amounted to R1,12 per litre on Monday.

The under recovery on the wholesale price for diesel is about 77 cents per litre.

There is more bad news. Yesterday afternoon the rand closed another 16c weaker against the American dollar, compared to its exchange rate yesterday morning. This weakening has not yet been incorporated in the Central Energy Fund’s latest computations.

The rand fell to a low of R12,26 yesterday, compared to a high of R10,27 against the dollar on May 23.

The dollar is riding the good news of the a lower U.S. unemployment rate, which was announced on Friday.

The rand was also affected by China’s lower producer price index, which dropped by 4,8% — which is bad news for a resource-dependent currency like the rand.

Nedbank Capital said there is no good news in sight that may help strengthen the rand.

The new fuel prices will be programmed into pumps at forecourts just after midnight on April 1. Motorists will do well to fill up on Tuesday, 31 March, at month end.

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