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The Automobile Association of South Africa (AA) expects another sharp rise in fuel prices to be announced next week, leading to record prices for unleaded 95 gasoline in South Africa in April.
Commenting on the unaudited month-end fuel price data released by the Central Energy Fund, the AA stated that prices for all types of fuel were going to increase.
“Based on the latest data, gasoline is slated for a massive 73 cents a liter increase, diesel a 39 cents increase and paraffin lighting and a 37 cents increase,” the AA said.
However, this was not the only increase that had to be taken into account, as another 27 cents will be added to taxes from the General Fund for Fuel and Road Accidents, as announced by Finance Minister Tito Mboweni in February.
“If you take into account the increase in taxes, gasoline could go up to R1 a liter and diesel by 66 cents a liter. The levies do not add to the cost of lighting the paraffin, ”said the AA.
“This means that the fuel price for April will be in the region of R17.32 per liter for ULP 95 inland, comfortably exceeding the previous high of R17.08 set at the end of 2018,” the AA said.
- ULP 95 – R1 rise
- Diesel – R0.66 increase
- Illuminating paraffin – R0.37 increase
35-40% in taxes
The AA said the recent two-month streak of oil price increases peaked in the third week of March and eased slightly, while the Rand had a similar trajectory.
“The minor relief from the pullback in oil and the exchange rate will be a cold comfort to South Africans reeling from the continued economic damage that is being inflicted as a result of COVID-19 and a decade of economic decline,” AA said.
The Association noted that increases in fuel prices would have widespread negative consequences for everyone in the country, not just motorists.
“We can only emphasize again the severe additional damage that these increases will cause to household budgets, both directly and indirectly as higher transportation costs spread through the value chain. Increasing public transport fares will surely not be very far either, ”said the AA.
In particular, starting in April, South African motorists will pay R5.96 per liter of fuel at GFL and RAF taxes, or between 35% and 40% tax on each liter purchased, the AA stated.
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