By: Jason Woosey - IOL

Following four consecutive months of decreases, fuel prices are set to increase again in July following a spike in international oil prices.

Month-end data from the Central Energy Fund (CEF) shows that the price of petrol is likely to rise by between 50 cents (93 Unleaded) and 53 cents (95 Unleaded), while diesel looks set to go up by between 82 cents (500ppm) and 84 cents (50ppm).

Following the increases, a litre of 95 Unleaded will cost around R21.09 at the coast and R21.88 inland, with 93 Unleaded costing around R21.74.

The wholesale price of 50ppm diesel is likely to rise to around R18.65 at the coast and R19.41 inland.

Keep in mind that these predictions are based on unaudited data. The final, and official, fuel price adjustments will be announced by the Department of Mineral Resources and Energy early this week.

The increases come as a result of higher international oil prices. 

Brent crude fluctuated between $62.90 and $75.40 during the month of June, with prices surging following attacks on Iran’s nuclear facilities by Israel and the US. However, oil retreated to around $66 in the latter part of the month following the ceasefire.

Brent Crude averaged $63.95 during the preceding review period, and given that prices hovered above that level for most of June, significant under-recoveries developed on both petrol and diesel.

This was mitigated to a degree by a stronger rand. Were it not for gains made by the local currency, motorists would have faced increases in the region of 68 cents for petrol and R1 for diesel.

However, the fuel price situation in South Africa has been aggravated by a rise in fuel taxes, which came into effect at the beginning of June, leading to smaller-than-expected fuel price decreases that month.

The general fuel levy rose by 16 cents per litre for petrol and 15 cents per litre for diesel, raising total fuel taxes in South Africa to R6.37 for petrol.

This raises serious cost-of-living concerns for South Africans who are already overburdened. Continually turning to fuel levies to fill budget gaps is unsustainable, the Automobile Association said, particularly in the absence of full transparency on how these funds are allocated and used.

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