By Ragheema Mclean

South African motorists are bracing for another potential petrol price hike in May, while diesel prices could see a slight decrease.

Data from the Central Energy Fund indicates that petrol prices are currently showing an under-recovery of around 30 to 40 cents per litre, setting the stage for a fourth consecutive price hike next month.

However, diesel prices are showing an over-recovery of around 28 cents per litre, indicating a possible price cut.

Automobile Association (AA) spokesperson Layton Beard noted that this is mainly due to fluctuating international product prices that have pushed oil prices up.

“We are looking at an increase of around 40 cents increase in petrol and 30 cents decrease in the price of diesel which is good news.”

These prices represent some of the highest fuel prices South Africa has experienced, with the country hitting a record high in petrol prices in 2022.

He highlighted that several other complex factors also influence fuel prices, including the rand-to-US dollar exchange rate, geopolitical conflicts in Europe and the Middle East and demand in the global market.

“Our concern that we’ve raised over and over is that the general fuel levy generates about a R120 billion to the fiscus every year. It’s the fourth biggest tax that the government collects every year.”

He cautioned that any reduction in the general fuel levy would likely result in the government seeking alternative sources of revenue, potentially leading to increased taxes in other areas.

“Our view is that the structure of the fuel price needs to be reviewed and we need to determine if there are any other line items that we can eliminate to make the fuel price lower on a sustainable base.”

VOC News

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