mobile menu mobile search

Big petrol price hike coming in June

Big petrol price hike coming in June

The Automobile Association warned motorists on Friday to brace themselves for a huge fuel price hike in June, with further spikes in the coming months.

The warning comes hours ahead of the official announcement of the fuel price adjustments that will kick in on June 1.

The AA said in a statement fuel prices are set for a sharp jump at the beginning of June, with the potential of further rises in the medium term.

Commenting on the unaudited month-end data supplied by the Central Energy Fund (CEF), the AA said the pump price for a litre of petrol is set to increase by 52 cents, while illuminating paraffin and diesel are set to go up by 61c/litre and 78c/litre respectively.

The reasons for the spike are the continued upward march of international petroleum prices in May and the weakening rand / US dollar exchange rate.

The combination of firmer oil and weaker rand has exposed the consumer to the full force of oil’s strength, the AA said.

On Friday before midday thew rand was R15.55/$ and Brent crude oil was selling for $48.73 a barrel. On Thursday world oil prices breached the $50/barrel mark for the first time in oer six months on signs that the surplus are coming to an end.

The AA expressed concern over the steady rise in oil prices in the current weak rand environment, notwithstanding international opinion that global over-supply could see prices pull back.

The AA said according to the Department of Energy, crude oil benchmarks have rallied since late April due to issues regarding geopolitical concerns affecting the market. Reductions in output in Nigeria, Columbia and the US contributed to the surge in prices during the past month.

The AA said the department noted that “an energy crises in Venezuela, where power outages due to a drought and subsequent reduction in power generation at the country’s main hydropower facility, was beginning to effect the wider economy including operations in the oil and gas sector”.

The recent wildfires in Canada also reduced crude oil exports to the US, forcing the county to draw on inventories.

“With South Africa’s weak economy, our concern is that even if oil prices moderate, further declines in the rand will mask the benefit. It is possible that fuel prices will test new highs in the coming months, placing yet more stress on consumers,” the AA said.

Fin24

More on the petrol price

Here is the expected petrol price for June 2016

Petrol price pain for consumers in May

Petrol price, rate hike double blow for SA consumers


News24Wire is the news wire service offered by Media24. It covers all the latest happenings in South Africa, and abroad....
Join the Conversation
  • Cheesy 2.0

    I think we can safely conclude our best days are now behind us.

    • Jerry leroux

      Yes, I agree fully it is simply going to get worse and worse even for pensioners.

    • MasterC

      That happened when the ANC killed the country ….. best advice to your kids ….. run, run for you life

      • Nextlevel

        Best advice for anyone under 45

    • CB045

      Yep. As we move further away from trusting the Lord Jesus Christ, things will definitely deteriorate. Follow the 10 Commandments and steer clear from jealousy might go a long way in being the safe route to relief.

      • Jacobus Pienaars

        I think you are looking for the brandy bottle

        • Jay

          Just another christian trying to shove their religion down our throats.

  • Orihalcon

    Just explain something to me. When oil was soaring over the $120 a barrel mark, we were still paying around this price point for fuel give or take. Then the price per barrel decreased by 70% and we only got a slight drop comparatively. Now the price is climbing again and the prices go up. I am aware economies of scale is at play, but the link between crude pricing and pump price based on movement eludes me!

    • keithbe

      Keep in mind how the Rand lost to the Greenback towards the end of last year. That has had a major impact on the crude uptick – paying an additional +-R2.00 extra for each $. Oil prices were lower with a failing Rand…Now there are real problems – poor performing Rand and a swing in oil prices…direct link to increased inflation….direct link by the cuckold SARB to raise rates.

    • bengine

      First up the actual oil price component of the price at the pump is around half – the rest is taxes,RAF, distribution etc – so any change in the oil price / R/$ has reduced effect (half the expected %).
      Oil has dropped in price but the rand has dropped in value – they have mostly cancelled each other out.

      • Nextlevel

        And tax had been added

      • Hennie

        I almost swore at you for being so right, but you are spot on. I am becoming poorer and poorer by the day.
        Lucky for me, I am much better off than a lot of people because I still have a motor car.

    • Ga77a

      Unfortunately the fuel price is not driven completely by the oil price. But rather the government need for a predictable and ever growing income from fuel sale. If the market does not support that then the fuel price goes up. Remember in 2008 the global market crash saw the SA fuel price half almost overnight. That was because of prudent fiscal policy. Now we have an idiot in charge, so not so lucky this time round.

      • CB045

        When government increase fuel tax, businesses have to increase their profit margin. In doing so, the product is sold at the higher price so that they can maintain their profit margin while the customer pays for the increased price and additional increase in VAT. (Government has to retain and better their lifestyle while the rest have to tighten their belts)

    • Jacobus Pienaars

      Rand crashed. By about 25%

  • YouThinkTheDarknessIsYourAlly

    The least Zuma and the ANC can do is start handing out free tubes of lube with the free barrels of KFC they using give out…we are going to need it :/

  • Kosenator

    So instead of punishing the one who dumped us into this crap, they rather punish the people of SA.

    • B N Reddy

      Very true. If the govt runs the country properly we would not be in this situation. This country has become more racist than the apartheid era. What Madiba fought so hard for is gone.Unfortunately the majority have no vision.

  • CRM083

    Zuma killed the Rand

    • Barbara Sattler

      not only.

  • Tau’ri

    Ohhhh, now it’s the wildfires in Canada… silly of me, I should have guessed.
    Next week might be due to landslides in Patagonia.

    • Silver King

      Wasn’t it the CIA? Or was that the week before?

      • Tau’ri

        Yup, the CIA is behind everything going bad here.
        And aliens from the Whereva Planet, they’re here and conspiring to take our beautiful rainbow nation apart. Mbeki said so, it must be true.

  • Karel van Tonder

    Stealing

  • Jacobus Pienaars

    The Zuma factor…. Rand dives, while oil climbs. More to follow …

  • Ray Mulder

    What else…

  • MelcolmX

    Do you know the figures that the government make per day on fuel is in Billions! And they want more from you! Yes you 64% supporters!

  • johnramsunder

    Shame ANC and Zuma. You promised the people of S.Africa a better life and living conditions than what you referred to as the apartheid era. The blacks of this country are the real and true racist of today. Fuel will forever increase, the country is bankrupt and the anc cannot see this, now they want to but a presidential jet for zuma. Shame upon than anc and zuma. The anc is heartless towards the people of this country. They soon will be demolished. all the values of Mandela has been buried with him.

  • snail112

    Don’t forget about all the oil reserves that was sold off to line someones pocket.

  • Hennie

    You’ll have to take public transport, or you;ll be broke before the end of the month.

Join our newest FREE BusinessTech newsletter today!
×