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Newcastillians, prepare to pay unthinkable fuel prices from April 2022. The petrol price increase is predicted to be the most significant hike in South African history.
According to the Automobile Association (AA), the price of petrol is expected to go up by between R2.07 and R2.15 a litre.
Diesel is expected to cost between R2.94 and R3.08 more per litre, while the price of illuminating paraffin is predicted to increase by R2.51 a litre.
AA spokesperson Layton Beard says the predictions are based on unaudited mid-month data from the Central Energy Fund.
He notes that if the price increase predictions are realised at month-end, these will be the largest increases in South Africa’s history and will have major ramifications for all consumers and the economy in general.
Deputy Finance Minister David Masondo has warned that with South Africa being a net importer of oil, the persistent conflict in Ukraine is having a severe impact on fuel prices which, in turn, is driving up food prices.
Participating in a Parliamentary debate that looked at the economic impact of the conflict on the South African economy, Masondo said there is the prospect of continued supply and demand imbalances, which risks driving inflation higher and tightening financial market conditions.
“Since the conflict, there have already been sharp increases in the prices of crude oil, maise, wheat, and sunflower oil futures contracts. This is likely to persist until a resolution to the conflict is found,” he said.
The Deputy Minister said higher fuel and grain prices erode the disposable income of consumers. “As a net importer of oil, South Africa, is unfortunately at the mercy of the global oil prices.”
Masondo added that the National Treasury is fully aware of the impact of these rising prices on the quality of the lives and the cost of living of South Africans.
“This makes the work that we have embarked on with the Department of Mineral Resources and Energy to review the approach to fuel pricing that much more urgent. We are working tirelessly to complete the work as soon as possible,” he said.
However, Masondo said that government cannot make any hasty decisions, as any changes made on fuel pricing will have a lasting impact on the industry.
On Tuesday, 15 March 2022, the Portfolio Committee on Mineral Resources and Energy welcomed presentations on fuel price increases by the Department of Mineral Resources and Energy, Central Energy Fund, National Treasury and the Council for Scientific and Industrial Research.
According to a statement issued by the portfolio committee, the presentations that highlighted how the price increase affects the country’s economic outlook were comprehensive. “They contained some proposals for the committee’s consideration, although the committee did not express a view on any of them.”
One of the various interventions brought forward was possibly considering fuel limits. This included how many litres each motorist was allowed per petrol station visit. This, however, was only to be considered if the situation around the fuel prices escalated further.
The committee resolved to first meet on its own to have a thorough discussion on the presentations and find a way forward, taking into account the seriousness and urgency of the subject matter. A date of such a meeting will be communicated in due course.
With the fuel prices set to increase even further, what are your thoughts on the matter?
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