Motorists should prepare for a petrol price increase of between 70c/l and 80c/l in April, the Institute of Race Relations (IRR) said on Wednesday.
IRR chief economist Ian Cruickshanks warned that if the rand and oil prices remain at their current levels, the fuel price could increase by 41c/l in April. That would be in addition to the 30c/l increase in the fuel levy that also takes effect in April.
“(This) could see motorists paying between 70c/l and 80c/l more for fuel,” he said.
Last week, the Automobile Association (AA) predicted an increase of between 31c/l and 35c/l in addition to the 30c/l fuel levy increase. That gives you a best case scenario of a R61c/l increase in the petrol price.
“Although the average rand/US dollar exchange rate has continued to retreat since the beginning of the month, this positive factor has been overcome by the renewed uptick in oil prices,” the AA said.
“Along with the further interest rate hike announced by the SA Reserve Bank, motorists’ budgets are likely to come under renewed pressure next month.”
Cruickshanks said this increase heaps more pressure on financially stressed households, which are already dealing with the interest rate hike that pushed the repo rate up to 7% per annum.
Added to that, the current drought has hit food inflation, with the South African Crop Estimates Committee estimating a three million tonne decrease in the maize harvest in 2016.
Potato prices, for example, were at record highs and Cruickshanks said this fact “brought home the full impact of the drought”.