End Of Government Relief Could Trigger Fuel Price Surge

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Motorists could be in for a nasty surprise at fuel pumps with the temporary relief measure to reduce the price of petrol, set to conclude at the end of May.

 


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In April, Finance Minister Enoch Godongwana announced a R1.50c reduction to the general fuel levy. This saved motorist's from adding this at the fuel pump.

This meant that despite an increase in the price of petrol by around 50c for the month of April, it could have been much worse. However, this relief was only temporary and it set to come to an end in May 2022.

The SA Automobile Association’s Layton Beard says without this relief, motorists can expect a significant increase.

Motorists' pain could be compounded as other measuring instruments used to calculate the fuel price are not in their favour. These measuring instruments include the US Dollar to Rand exchange rate and the price of a barrel of crude oil.

Beard however explains that the determination of the fuel price based on these measuring instruments are done over a period of time and we are still early in the month.

He said, “It’s still very early in the month, we're not even halfway through the month so a lot could happen between now and when the price is actually adjusted going into June. The one thing we obviously know is that this relief measure is coming to an end and that is concerning to us and I think that without that relief measure there could be a significant increase either way to the fuel price”.

Should the cost of fuel increase significantly, it will impact all consumers in the country.

Beard explained that fuel is a big input cost for many sectors and in order to absorb these costs, these increases are passed to the consumers of goods and services. He adds that he expects the government to make announcements around possible relief measures as the month goes on.

 

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