Petrol is likely to reach record highs in June, but diesel could see some relief.
Image: ChatGPT
While diesel customers could see some much-needed relief in June, petrol prices are heading for all-time highs as the phase-out begins for Treasury’s fuel tax relief measures.
The latest daily snapshot from the Central Energy Fund shows that petrol is heading for increases of between nine cents (93 unleaded) and 16 cents (95 unleaded).
On a more positive note, a significant over-recovery has developed for diesel, with data pointing to decreases of between R3.84 for 50ppm and R4.27 for 500ppm. In fact, the latest daily numbers show that the diesel relief could swell further between now and the end of this month if conditions remain favourable.
But that all comes with a giant caveat, as government has so far indicated that the fuel tax reprieve, announced at the beginning of April, will be halved from June 3 before being phased out at the beginning of July.
This means an additional R1.50 needs to be worked into the petrol price and R1.96 into diesel.
With this factored in, South Africans are facing a petrol price increase of around R1.66, while the diesel decrease could be limited to between R1.88 for 50ppm and R2.31 for 500ppm. This follows sharp increases implemented in May and April.
June's predicted adjustment could see 95 unleaded petrol reaching all-time highs of R27.42 at the coast, surpassing the previous July 2022 high of R26.90, while Gauteng residents will now pay in the region of R28.13. The wholesale price of 50ppm diesel is likely to fall to R29.66 at the coast and R30.42 inland.
However, a lower Slate Levy, which amounted to R1.22 in May to compensate fuel companies for price fluctuations in the previous month, could help counteract the reinstated fuel taxes.
Another interesting development, which could bring relief in the longer term, is that South Africa’s Minister of Mineral and Petroleum Resources, Gwede Mantashe, is pushing for the establishment of a new state-owned company to tackle rising fuel prices.
During his budget vote speech on Tuesday, Mantashe said that South Africa would need a long-term solution to fuel price shocks, as well as a deeper look at its over-reliance on imports.
In a separate development, the Economic Freedom Fighters (EFF) are expected to appear in the Western Cape High Court on Wednesday to challenge Finance Minister Enoch Godongwana’s authority to set and amend the fuel levy. The party argues that only Parliament has the constitutional power to impose and amend taxes.
IOL Motoring