AA predicts a significant increase in fuel prices for June

The Automobile Association (AA) has warned that motorists will face a massive fuel price increase in June. AA says the current unaudited data from the Central Energy Fund (CEF) shows fuel increase across the board.

It says consumers will face further pressure because the government’s earlier relief of reducing the General Fuel Levy (GFL) ends in May.

The latest estimates predict petrol to increase by almost R2 a litre at R1.97 while diesel will go up by R1. 62 cents a litre.

In late March, government reduced the General Fuel Levy by R1.50 cents for April and May. This brought temporary relief to consumers. However, from next month consumers will have to deal with the rising fuel costs- minus the relief.

The Central Energy Fund expects fuel to go up to be between R1.93 cents a litre and R1.97 cents a litre.

Diesel is expected to increase by R1. 62 cents a litre. Illuminating paraffin is expected to climb by a whopping R2.14 cents a litre.

”This is obviously very concerning to the Automobile Association and we are rapidly nearing the end of May. In March when the government announced the relief of R1.50 cents on the fuel levy it said it would be announcing further proposals to mitigate against rising fuel costs and we eagerly await government of what those proposals are before the end of the month,” says AA’s Layton Beard.

The association says the price increases reflect data from the middle of the month, the final data may vary between now and when the adjustment is finally made.

Beard says the Road Accident Fund levy also contributes to the price of fuel:

Longer-term solution

Meanwhile, consumer activist Ina Wilken says the government needs to a find longer-term solution for the steep fuel hikes. If the fuel levy is discontinued this would mean further hardships for consumers.

“Once again the consumer is paying the brunt for the inadequacy of government. How on earth can the government now increase petrol, it is going to have a devastating effect on everything consumers buy or do. They promised that they will lift the levy on fuel end of May. Nothing has happened so far. Isn’t it time that you have a look at your own people and start considering your own people, they just can’t afford it anymore?”

There has been no communication from government on whether the relief will be extended. It will give further direction should there be any changes in the coming weeks.

The two main factors which influence local fuel prices are the R/US dollar exchange rate and international oil prices.

The Rand is currently trading weaker against the dollar and oil prices are also still high.