May fuel shock looms: price hikes ease slightly, but diesel still set to spike nearly R6/l

It won’t be long before the Department of Mineral Resources and Energy (DMRE) is ready to adjust the country’s petrol and diesel prices again. Until then, we’re holding thumbs that the Central Energy Fund’s (CEF) daily predictive snapshots will tell a better story than the one they’ve been telling.

Dread it, run from it, petrol price hikes arrive all the same

If you missed the news, fuel prices are set to go up this May. Way up. At the beginning of April, it was believed that diesel drivers would be hit with an increase as large as R11/l, while petrol drivers faced a smaller (but still rough) R4/l increase. These projections have since eased, though drivers are still in for a shock come May.

It’s worth mentioning that the figures below aren’t final and are subject to change. The CEF, in conjunction with the DMRE, tracks the economic factors that influence the price of fuel locally. These, primarily, are the average Rand/US Dollar exchange rate as well as the price of oil globally. Yeah, those prices? They’re up. Way up.

It’s this that has led to the massive increases in fuel prices across the board. While tensions are easing globally, the closure of the Strait of Hormuz has had a massive impact on global oil stocks, driving the price right up — and with it, South Africa’s fuel prices. Only when oil prices return to ‘normal’ will our fuel prices, unfortunately.

To help soften the blow, the government will once again step in to offer some small relief from the coming hikes. In April, this took the form of a R3/l fuel tax reduction, which will likely continue for the next two-or-so months. It’s believed that this will end up costing the government in the ballpark of R10 to R12 billion. That’s… fine by us.