March increase prices, rise of fuel prices around the corner

Johannesburg – South Africa’s fuel price nightmare continues unabated, following recent news from the Department of Energy that both grades of petrol will increase in price by R1.46 per litre from Wednesday, 2 March, while diesel will go up by between R1.44 (500ppm) and R1.48 (50ppm).

To make matters worse, there is no sign of relief ahead as Russia’s invasion of Ukraine is threatening to send international oil prices spiralling further.

The R1.46 petrol hike for March will push the price of a litre of 95 Unleaded up to R20.88 at the coast and R21.60 inland, where the slightly cheaper 93 Unleaded will now retail for R21.35.

This, of course, adds up to a significant price premium when filling your tank. For instance, refuelling a small hatchback like a Kia Picanto, assuming that you’ll be putting 30 litres of petrol into its 35 litre tank, will now cost you R640.50, which is an increase of R43.80. Putting 35 litres in a Volkswagen Polo will cost you R51.10 extra (R747.00 in total), while a Tiguan’s 53 litre refuel will set you back a further R77.38 (R1188).

Estimated refuel quantity = maximum tank capacity minus five litres
Estimated refuel quantity = maximum tank capacity minus five litres

But the worst hit will be drivers of large SUVs and bakkies with 80 litre tanks, and here a 75 litre diesel refuel will cost R111 more than it did in February. The cost of a tank, however, will vary between the different fuel stations as diesel is deregulated.

According to the department of energy, the March increase comes as a result of strong international oil prices during February, as well as a negative balance in the Slate Levy. The stronger rand, which traded at an average of R15.23 during the review period versus R15.50 during the previous month, was not enough to significantly offset the huge oil price spike.

The Automobile Association says the price increases will have a severe and immediate effect on the poor, while long-term inflation is also an inevitable result. Illuminating paraffin is also set to increase by R1.21 per litre next month.

“These increases will certainly impact on every single South African given the reliance the country has on fuels for transportation, manufacturing and in the agricultural sector,” the AA said.

But will the Russia-Ukraine conflict lead to even higher prices in April and May?

“For now, it’s a question of wait and see how these prices move in the next few weeks,” the AA said.

“One silver lining, though, is that any potential increases will not be combined with increases to fuel taxes as the Minister of Finance earlier this week announced the General Fuel and Road Accident Fund levies will not increase this year.

“This is good news, but must be tempered by what happens in the next few weeks to the overall pricing of fuel,” the AA added.