Durban - Experts have predicted a mixed outlook for fuel prices for May, with data from the Central Energy Fund (CEF) indicating a decrease in the price of diesel but an increase in the petrol price.
According to experts, a diesel price decrease would benefit the economy, while a minor petrol price increase could leave already battling consumers with less money in their pockets.
Layton Beard, AA spokesperson, said unaudited data from the CEF has indicated significant increases to the prices of both grades of petrol, pushing the prices above R23 for the first time this year.
“According to the latest data from the CEF, ULP (unleaded petrol) 95 is expected to climb by around 52 cents a litre, and ULP93 by around 56 cents. The wholesale price of diesel is expected to decrease by between 31c/l and 57c/l, while the cost of illuminating paraffin is to come down by around 32c/l.”
Beard said the decrease to diesel and paraffin prices is good news, especially as the country enters colder months.
“The silver lining, is the expected diesel price reductions. Diesel is a big input cost in major sectors such as agriculture, mining and manufacturing and an increase here often contributes to increased prices of basic commodities.
“The current increase in the consumer price index to 7.1% in March and food inflation hitting a 14-year high of 14.4%, plus an increase in diesel prices, would have resulted in very unfavourable conditions for consumers.”
Beard added that these were difficult times, and petrol price increases will come as bad news for many who would have to dig even deeper.
Professor Bonke Dumisa, an independent economic analyst, said that as much as consumers were going to be disappointed with a petrol price increase, the diesel price coming down was good news.
“At my last viewing of CEF data my expectation is that we can expect no more than a 25 cent a litre increase in petrol and 50 cents a litre decrease in diesel.
“The good news is diesel is a major input cost and most things are transported by trucks, so it is welcome news that trucks will pay less for diesel.
“We must remember that food inflation is at 14%; a major driver is the many diesel price rises we saw last year. In the economy as a whole, the diesel price is more important to South Africa.”
Dumisa said consumers might be paying more for fuel but there was little that could be done to control the petrol price. “Unfortunately our petrol price is determined by the price of Brent crude oil.”
Professor Irrshad Kaseeram, from the University of Zululand’s Economics Department, agreed that he also expected an increase in petrol and a decrease in diesel.
“The Central Energy Fund points to an under-recovery in petrol prices of around 78 cents to 86 cents, hence we can expect a price increase here. However, in regard to diesel prices there is an over recovery of between 20 cents and 38 cents, which will mean marginal respite for consumers and the transport industry.
“This marginal respite will extend to food prices not rising due but is bad news for motorists and commuters using minibus taxis where petrol fuel usage predominates.”