SA set for pain at the pumps as fuel levy kicks in

Cape Town - The overall price of fuel is set to increase in April because of the addition of increased fuel levies, the Automobile Association (AA) said on Thursday.

This is despite basic fuel prices showing signs of further decreases at the end of the month, the AA commented on unaudited mid-month fuel price data released by the Central Energy Fund.

The AA said the basic price of petrol likely decline of around 12 cents a litre, diesel  by 18c/litre and illuminating paraffin 13c per litre.

However, despite these predicted decreases to the basic fuel price, the additional 52c increase to the fuel levy will push the overall price of fuel at the pumps up in April.

The AA then expectts that the  overall price will jump 40 cents in April because of the increases to the general fuel and Road Accident Fund (RAF) levies announced by former Finance Minister Malusi Gigaba in his maiden budget speech in 2018.

Gigaba announced the general fuel levy will increase by 22c a litre from R3.15 to R3.37, while the RAF levy will increase by 30c from R1.63 to R1.93. 
At present 38% and 39% of a litre of 93 octane unleaded petrol inland and coastal goes towards levies.

"The rand/dollar exchange rate has been virtually flat since the beginning of the month, with the local currency having weakened against the dollar by around two cents," the AA said.

"Over the same period, international oil prices have retreated slightly in favour of SA fuel users."

A litre of unleaded 93 octane fuel inland currently costs R13.54. With a predicted basic fuel price decrease of 12c per litre in April, this will move down to R13.42.

But, the overall price of a litre will likely increase to R13.94 with the additional 52c a litre on the levies.
A litre of unleaded 93 octane at the coast currently costs R13.13. With the predicted decrease of 12c per litre this will move down to R13.01 a litre but, again, the overall price will increase to R13.53 with the increase to the levies.

The increases to the levies is concerning to the AA.
“The increases are way above inflation, and will have a knock-on effect on other prices, including public transport. The poor, who are already under enormous financial strain, will bear the brunt of these increases, which come at the same time VAT is increasing to 15%," it said. 

"These increases will unfortunately result in a heavier burden for the very people who need relief the most."

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