The Automobile Association of South Africa (AA) has warned that the record petrol price increase in August is likely to have an impact on consumer prices across several economic sectors.
Last week, Mineral Resources and Energy Minister Gwede Mantashe announced fuel increases of up to 91 cents per litre, which means inland motorists will pay more than R18 per litre of petrol starting on Wednesday (4 August).
‘Everything will be more expensive’
Speaking in an interview with talk radio 702 on Tuesday (3 August), AA spokesperson Layton Beard said motorists are already under pressure following another record high of over R17 a litre in April.
“That [latest increase] is certainly a huge cause for concern – not just to motorists, but to all consumers. Everything is going to get more expensive,” he said.
Beard explained that while government taxes play a role, the increases in August have been caused by a rise in international petroleum product prices and a depreciation of the rand against the US dollar.
“We are definitely seeing that the taxes being added by the government are paying a significant role, but in terms of the increase for August, the Department of Mineral Resources and Energy said that 48 cents of the increase was the result of international petroleum product price increases and the contribution of the rand/US dollar exchange rate was 43 cents.”
Around 40 percent of the petrol price is composed of taxes, something that offers the government “wriggle room” to help alleviate pressure on motorists and consumers, Beard argued.
Petrol price increase for August 2021 in South Africa
According to Mantashe’s announcement, South Africa’s petrol prices in August 2021 will increase as follows:
- Petrol (both 93 ULP and LRP): 91.00 c/l increase.
- Petrol (both 95 ULP and LRP): 91.00 c/l increase.
- Diesel (0.05% sulphur): 55.58 c/l increase.
- Diesel (0.005% sulphur): 54.58 c/l increase.
- Illuminating Paraffin (wholesale): 50.00 c/l increase.
- SMNRP for IP: 67.00 c/l increase.
- Maximum LPGas Retail Price: 226.00 c/kg increase.
Inland motorists and consumers will therefore pay the following prices at the pump:
|Fuel (inland)||July official price||August official price|
|0.05% Diesel (wholesale)||R15.08||R15.63|
|0.005% Diesel (wholesale)||R15.12||R15.66|
Mantashe said the average Brent Crude oil price rose from $73 to $74 over the past month. A decline in inventories caused the higher prices.
“The movement in international refined petroleum product prices followed the increasing trend in crude oil prices. This led to higher contributions to the Basic Fuel Price of petrol by 48.29 c/l, diesel by 16.37 c/l and 15.53 c/l, and illuminating paraffin by 17.76 c/l,” the Minister added.
The rand also depreciated from from 13.92 to 14.54 to the dollar over the same period.