July could see another significant fuel price hike, mid-month data suggests

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16 June 2022| 15 Dhul Qadha 1443

There is no end in sight for South Africa and the rest of the world’s fuel price crisis, and early data suggests that prices could rise even further at the beginning of July.

Unaudited data released by the Central Energy Fund shows an under recovery for petrol that would translate into an increase of around R2 a litre if the current oil price and currency trends persist until the end of the month. Diesel looks set to rise by around R1.30 a litre but recent daily stats suggest that could rise somewhat.

But it could get even worse than that for motorists and commuters.

At the beginning of June, the Finance Ministry announced a one-month extension of the temporary R1.50 “fuel tax holiday”, and if there are no further interventions at the end of the month, this will also inevitably be factored into the July fuel price.

South Africans, who are paying record prices for fuel, can ill afford another increase. 95 Unleaded petrol retails for R23.42 at the coast and R24.17 in the inland regions, where 93 Unleaded costs R23.94.

When commenting on the most recent fuel price increases at the beginning of June, the Automobile Association pointed out that the increases were being driven by the conflict in Ukraine, and consequent sanctions against Russia, as well as tighter global monetary policies.

The association also welcomed the government’s plans to implement further measures to mitigate the fuel price crisis but urged quick action.

“The temporary relief is exactly that: temporary, and it’s now apparent that government must find more longer lasting solutions to mitigate against rising fuel costs,” the AA said.

“Government must act now to initiate a review of the fuel price: to examine all the components that comprise a litre of fuel, establish their continued relevance as part of the fuel price, and to determine if the calculations used are still correct.

“Such a review is long overdue and the longer government delays in getting this started, the longer it will take to find sustainable solutions.”

International oil prices have remained stubbornly high throughout July, with Brent Crude trading at $121 a barrel around mid-month. This leave very little wiggle room for any possible relief measures.

Source – IOL News