Cape Town – South Africans must expect a massive fuel price increase in June, analysts have reportedly warned, after the fuel levy reprieve that was granted to consumers by government to assist them with a lower petrol price kicks in again from the end of May.
According to EWN, analysts warned that there is little that government can do to cushion society further, as the increase would likely be driven by factors outside of its control.
“Based on information, about two days ago the petrol price would’ve increased by nearly R2 a litre in any event. So we’re talking about R2 plus R1.50 bringing it up to R3.50 that the increase is likely to be per litre of petrol in June,” the report quoted Economist Dawie Roodt as saying.
Roodt said three factors would add to the increase in the petrol price next month, The Citizen reported.
The three factors are:
- The exchange rate of the rand: The rand weakened and because of that we can expect an increase in the petrol price of around R1 a litre.
- International oil prices: The international oil price has been relatively high and that will add another R1 to a litre of petrol.
- Fuel levy: The reduction in the fuel levy will expire at the end of May. This will add another R1.50 next month.
“The R1.50 cents/ litre will be back into the fuel calculation – and considering the exchange rate depreciation of 9.0% month-on-month (m/m) and 11.4% year-on-year (y/y) so far with crude weakening by 5.4% m/m and 59.0% y/y,a further R3/ litre in fuel increases is possible in June 2022 if the relief measures are not extended or a new fuel price determination is implementedAnalysts have warned motorists to expect a massive petrol price increase next month,” Business Tech quoted Paul Makube, senior agricultural economist at FNB Agri-Business as saying.
Analysts encouraged South Africans to plan well financially, as life will in all likelihood become more costly.