D-day for the petrol increase is set for midnight tonight (Tuesday 5 June 2018) after the energy department announced that 95 and 93 octane petrol will increase by 82 cents a litre and diesel by 85 cents a litre. Illuminating paraffin will rise by 82 cents a litre.
The current price increase is the result of a weaker rand against the US dollar compared to the previous period's reviews and an increase in crude oil prices has driven the steep increase in petrol prices. An under-recovery during the previous fuel price increase also had to be accounted for. “The Department of Energy’s monthly close-out happened early due to the public holidays in April, after which the rand lost almost 60 cents against the US dollar in a matter of a day. This meant a substantial fuel price rice was a near certainty from the start of May,” the AA said.
The AA also reported that another petrol price increase may be expected in July if the market conditions remain as they are and are expected to increase to as much as more than R16 per litre, steadily moving towards R17 per litre.
The increasing price of paraffin comes as a concern as most people rely on paraffin in the colder winter months, on top of the many other price increases, affecting the poorest in the nation the most. “There appears to be some possibility of lower oil prices in the medium term with OPEC countries discussing a production increase. However, this will rely on a stable rand for fuel users to feel the benefit, which is not certain at this stage. We advise fuel users to expect further hikes and continue to economise in all ways possible,” the AA said.
As of tonight's increase, 1 litre of petrol will cost as much as 1 litre of full cream milk, as much a 2 litre bottle of Coca-Cola, and will be more expensive than a 250 ml can of Red Bull which is sold for R14.99. In January last year, 93 octane petrol cost only R13, 09 per litre and 95 octane petrol cost R12, 85 per litre demonstrating just how steeply prices have increased from 2017 to 2018.
It's certain that petrol stations will be buzzing with people trying to save a couple of extra bucks tonight.