SA’s Energy Department has announced a new price hike for petrol and Diesel and paraffin starting from June 1.
The department says petrol price will now be 52 cent per litre while diesel will be increased by 76 cents and paraffin increased by 62 cents a litre.
With the announcement of a new price increase for these products, Motorists are encouraged to brace up as more increase is bound to take place in the medium term.
This price increase in petrol price accounts for the second time in just two months as it went up by 12 cents per litre on 4 May. Diesel went down by between one and two cents per litre, while illuminating paraffin decreased by nine cents per litre.
According to the Automobile Association (AA) who joined in calling for motorists to prepare ahead of the increase, the price hike was caused by the rising prices of International petroleum against the SA rand which has continued to weaken in its per dollar rate.
“International petrol price continued their upward march during May and the weakening rand/US dollar exchange rate has exposed the consumer to the full force of oil’s strength,” said the AA.
“Petrol price is set for a rise to 52 cents a litre in June, illuminating paraffin will be up 61 cents, and diesel a full 78 cents.”
The Department of Energy, explained that crude oil benchmarks have rallied since late April because of issues regarding geopolitical concerns affecting the market.
The drop in output in Nigeria, Colombia and the US contributed to the surge in prices during the past month.
“An energy crisis in Venezuela, where power outages due to a drought and subsequent reduction in power generation at the country’s main hydropower facility, was beginning to affect the wider economy including operations in the oil and gas sector,” said the department.
Meanwhile, economists are of the view that the additional rise of these products will deepen the surffering and hardship of the people who are already battling to put food on the table.
The CEO of debt management firm Debt Rescue Neil Roets lamented on the hike of virtually everything consumed including road transports which convey food products among others as a result of the pump price increase.
“There is no doubt that we are entering uncharted territory in terms of the full impact that the fuel price increases are going to have.” Roets said, adding that he 50 cents a litre increase expected for the petrol price is going to hit motorists hard and depending on how the rand performs and the steady rise in the price of crude oil further increases were likely.”
Economist Dawie Roodt said the fuel price increase had been expected because of the erratic performance of the rand and the increase in the price of crude.
“I think the halcyon days of cheap crude are over and South African consumers would be well advised to tighten their belts even further to prepared for the price increases that will follow the present fuel price increase and further escalations down the road.”
He however called on the SA government to intervene by lowering the fuel price levy that had been imposed following finance minister Pravin Gordhan’s budget speech.
“Motorists should not be seen as the government’s cash cow and a concession now would go a long way to bring some relief to consumers whose budgets had reached breaking point.
“We are on the eve of a perfect storm which is going to affect everybody but especially the poorest of the poor who spend more than 50% on food.”
He further added that the fact that most consumers owed more than 75% of their monthly salary cheques to financial institutions showed just how dire the situation would be in future.