Johannesburg - Inflation has been hitting South Africans from all angles in the past two years, and petrol prices have been particularly stubborn, thanks to a persistently weak rand and steep international oil prices.
Thankfully, the petrol price equation has turned positive in the past week, with the latest daily reports from the Central Energy Fund showing a small over-recovery. This, over the space of a month would lead to a price decrease, but given that a state of under-recovery existed for most of the month, an increase remains on the cards for May.
The daily snapshot from the CEF is pointing to increases of 60 cents for 95 Unleaded petrol and 65 cents for 93 Unleaded, but the over-recovery situation is eating away at this. Should the trends persist until the end of the week when prices are finalised, the increase will probably fall between 40 and 50 cents.
Things are looking rosier on the diesel front where we’re seeing the average over-recovery for the month is pointing to decreases of 28 cents for 50ppm and 54 cents for 500ppm. But given that the latest daily numbers are more than R1 in the green, respective price cuts of between 40 and 65 cents are certainly possible.
A 50 cent petrol price increase will raise the cost of 95 Unleaded to R22.82 at the coast and R23.47 inland, where 93 Unleaded will rise to around R23.14.
Illuminated paraffin prices are looking set to come down by around 32 cents or more.
While the CEF data gives us a good idea of what to expect next month, we’ll know the official petrol and diesel prices for May only when the Department of Energy announces them, probably early next week.
Petrol prices remain historically high in South Africa, with the price of a litre of 95 Unleaded having increased by more than R5.50 in the past two years and by around R9 in three years.
A weak currency and stubbornly high international oil prices have been driving the increases in recent years, and the latter situation became more volatile earlier in April when the OPEC+ countries announced surprise oil production cuts, which sent crude oil surging to around $86 per barrel.
On Tuesday, 25 April, Brent Crude oil was trading at $82.70 a barrel.
Aggravating the fuel price situation is that South Africans pay R6.11 in taxes and levies on every litre of fuel, although, thankfully, the government elected not to increase these rates in 2022 and 2023.