Cape Town - Financially stretched motorists will have to dig much deeper than ever before to fuel their vehicles as yet another massive increase kicks in from Wednesday, taking the price of petrol to record highs.
The increase announced by Mineral Resources and Energy Minister Gwede Mantashe sees 95 ULP rise by R2.57, pushing the cost to R26.74, while an increase of R2.37 to 93 ULP will see consumers forking out R26.31 a litre.
The inland wholesale price of 500ppm diesel will be R25.40 and 50ppm diesel will cost R25.53. This is nearly R10 a litre more than a year ago.
Mantashe blamed “international factors” for the increases and said these include the fact that South Africa imports both crude oil and finished products at a price set at the international level.
He said a major factor in the increase of the international petroleum prices remained the ongoing conflict in the Ukraine which has contributed to supply and demand pressures.
On Monday the opposition DA handed in its Fuel Price Deregulation Bill for processing by Parliament’s legal services. The bill hopes to amend the Petroleum Products Act.
Speaking at a picket outside Parliament on Monday afternoon, DA Mineral Resources and Energy spokesperson Kevin Mileham said the bill’s objective would be to increase competition in fuel price setting at both the wholesale and retail level, which would in turn bring about lower fuel prices as retailers would be forced to compete to win customers based on price levels.
With an eye to possible collusion in a deregulated market, Mileham said: “The Competition Commission will be tasked with keeping a close eye on the fuel price market. Should any anti-competitive practices be determined, swift investigation and remedial action will follow.”
He said the current regulated system was rigged against South African consumers as the average fuel price was made up of at least seven levies which accounted for at least 20% of the fuel price.
The Automobile Association (AA) said in a statement that in addition to the increases to the basic fuel prices, the R1.50 relief off the General Fuel Levy (GFL) given by the government for May and June, was halved for July which adds to the increases.
“This means the increase of R1.82 to 95 ULP is, effectively, an increase of R2.57. This, and other increases will undoubtedly, play a big role in the economy going forward,” the statement said.
In December last year, after the petrol price rose above the R20 a litre mark, Finance Minister Enoch Gondogwana said the government would consider reforming the way in which the fuel price is calculated.
Motor Industry Staff Association chief executive Martlé Keyter said: “There is no urgency from the government to review the fuel methodology to bring relief to motorists against soaring fuel prices.”
Anchor Capital Investment analyst Casey Delport said petrol was more than 27% more expensive than it was in May 2021 when the average price of a litre of diesel was R16.20, meaning it cost R729 to fill a 45-litre tank.
Fourteen months later, with the average price at R26.74 a litre, filling the same tank will cost R1 203.30.