Motoring

Here’s how much more South Africans can expect petrol to go up in 2018

Staff Writer

 ·6 Apr 2018

According to March’s aggregated sales data from the National Association of Automobile Manufacturers of South Africa (Naamsa), domestic vehicle sales increased year-on-year for the first time in 2018, as positive sentiment started to bring consumers back into the new vehicle market.

Derick De Vries, head of VAF & Fleet Management at Standard Bank, said that the higher sales in March could be attributed to the fact that consumers and fleet operators took advantage of buying at lower costs before the VAT increase to 15% kicked in from 1 April .

Increases in ad valorem tax also encouraged buyers of luxury vehicles to beat the month end deadline, he said.

“GDP growth is forecast to improve from 1.3% in 2017 to 1.8% in 2018 according to our estimates,” said De Vries

“The main driver for the growth is accelerated consumer spending growth underpinned by real wage growth. The average inflation rate, meanwhile, is expected to decrease from 5.3% in 2017 to 5.0% in 2018, but this has been adjusted upwards following the various tax hikes announced in the Budget Speech,” he said.

These tax hikes are expected to have a notable effect on the cost of petrol, and Standard Bank said that it expects average petrol prices to increase by 9% in 2018 relative to 2017. This means the price could be well over R15 to the litre by the end of the year.

“The increase in fuel levies, which came into effect in April 2018, as well as the slight depreciation of the rand, halted the run of consecutive fuel price decreases at the start of 2018,” it said.

This means that South African motorists can expect similar increases to those seen in 2017, with the cost of 93 petrol rising 10.7% from R13.09 to R14.49 between January and December.

Similarly the cost of 95 petrol and diesel increased by 10.7% and 13.6%, respectively, over the same time-frame.

2017 petrol price changes

2018 petrol price changes (January – April)

Read: What you need to know about opening a petrol station franchise in South Africa in 2018