South Africans can expect a massive increase in the fuel price when they fill up at the pumps next week, thanks mainly to rising international oil prices.
Brent crude oil traded at around $76 on Tuesday, having peaking above $80 earlier in the month, and with analysts noting that prices could head toward $100 a barrel.
Bob Parker, an investment committee member at Quilvest Wealth Management, told CNBC’s “Squawk Box Europe” on Monday that a shutdown in Venezuelan production could prompt crude prices to spike.
“I think that Saudi Arabia, the rest of OPEC and Russia have achieved their objective of clearing this industry overhang from the oil market,” he said.
Rising oil prices, in tandem with a softer rand in May, means that the fuel price is expected to edge closer to R16 per litre to new record highs in June.
The latest data from the Central Energy Fund shows that the petrol price is likely to increase by around 85 cents, with diesel up 85 cents, and paraffin by 83 cents in a month when more is consumed.
Commenting on unaudited mid-month fuel price data released by the Central Energy Fund earlier in May, the Automobile Association (AA) expressed concern over the impact of fuel price hikes on the economy.
“Rises in the fuel price increases the cost of doing business, and companies have few options but to pass these costs on to consumers. Worryingly, people who use illuminating paraffin for lighting, heating and cooking will suffer a further blow as the country heads into winter,” the AA said.
“The deferred loss from last month will be included in this month’s adjustment, which is currently looking to be substantial,” the association said.
CEO of Debt Rescue, Neil Roets said that the expected hike in the fuel price – coming on top of record increases in May – will have a massive impact on consumers.
“We can see from the record number of petitioners coming to us to seek relief from their massive debts by going under debt review, that they are at the end of their tether.
“Any further increases in their cost of living is going to result in people going hungry – something which we’ve rarely seen in this country before,” he said.
This is what you can expect to pay in June:
|Fuel||May official||June expected|
|0.05% Diesel (wholesale)||R13.34||R14.20|