South Africans warned about more suffering despite petrol price decrease

Despite the price of petrol going down for May, concerns have been raised over the impact of rising costs of diesel and paraffin could have on South Africa.

Petrol prices dropped by a few cents at midnight with both 93 and 95 UPL petrol decreasing by 12 cents per litre.

95 ULP will now cost R21.84 per litre in inland and R21.09 per litre for the coastal areas.

However, the price of diesel increased by 98 and 92 cents per litre for 0.05% and 0.005% sulphur, respectively, which has raised concerns for some.

According to the Automobile Association (AA), the price increase for diesel as well as illuminating paraffin, by 79.60 cents per litre, will have a substantial impact on the cost of living in the country.

“Naturally, the decreases in petrol are welcome. They will offer some relief in the short term. Of concern, however, are the high increases in diesel and illuminating paraffin which will, undoubtedly, put extra financial pressure on millions of South Africans already struggling to make ends meet.

“The price of illuminating paraffin is particularly worrying as this fuel is used for cooking, heating and lighting and comes as [South Africa] enters winter,” the AA said.

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Speaking to 702 on Tuesday, Gavin Kelly, CEO of the Road Freight Association also shared the same sentiments, warning that the diesel price hike will have a knock-on effect on consumers.

“It’s going to have a huge knock-on effect. That’s a rand a litre, and there are several transporters who live from hand to mouth. They are the guys who don’t have the luxury of contracts.

“They’ve got to go out there and find work and for them, that would be the deal-breaker when they now say ‘I’m going to have to charge you x amount more for every kilometre that I drive your load’,” he said.

“At the end of the day, you and I are going to be paying more because 88% of all goods are transported on the road in this country,” Kelly added.

The Department of Mineral Resources and Energy indicated on Tuesday that the diesel and paraffin prices climbed “because there is still a shortage of diesel supply which is due to lower exports from Russia as a major exporter of distillate fuel, low inventories globally as well as higher demand for distillates”.

Fuel levy

Meanwhile, AA has called on the government to find a permanent solution to the rising cost of petrol in South Africa, with the temporary reduction of the general fuel levy (GFL) set to end soon.

“Government provided short-term relief through reducing the general fuel levy, but this relief ends at the end of May going into June.

“If the general fuel levy returns to its set rate, that will add another R1.50 per litre to petrol and diesel and will certainly push the prices of these fuels much higher.

“The question now is how the government plans to deal with the fuel price going forward, and how, ultimately, this will result in sustainable relief for SA consumers,” the organisation said.

The temporary relief saw the country’s fuel levy for petrol going down from R3.85 per litre to R2.35 per litre.

READ MORE: Fuel levy relief ‘hasn’t entirely taken the pain away’, says AA on petrol price hike

The move, announced by Finance Minister Enoch Godongwana in March, was seen as a relief for motorists who continue to fork out money for the high petrol price amid the ongoing Russia-Ukraine conflict which has affected fuel prices globally.

Government has indicated that it plans to take further steps to ease the burden on motorists in the future by deregulating the price of petrol.

The deregulation plans will only occur once the Treasury figures out how to recover the R90 billion loss from the fiscus it would see if fuel taxes are removed in one go.

Godongwana previously indicated there were many options on the table to achieve this, such as additional taxes on motor licence renewal fees to fund the Road Accident Fund (RAF).

There have been talks of the RAF levy being scrapped from the fuel levy and moving elsewhere, which has been backed by Parliament’s Portfolio Committee on Mineral Resources and Energy.