South African motorists are in for a rough and expensive ride as petrol prices are set to breach the R10/l mark on May 4 this year, a level last seen in mid-2008.
South Africa’s Department of Energy announced on Thursday that pump prices for all grades of petrol in the main inland commercial region would increase by 29c a litre, or 2,9%, rising from R9,96/l to R10,25/l.
Economists’ Mike Schussler told Engineering News Online that there was still a good possibility of further price increases, owing to the wave of political uncertainties in the Middle East and North Africa.
Geopolitical tensions have already seen oil prices surpassing $100 in recent months, despite sufficient supply.
Schussler said fears that the unrest will spread to the major oil-producing countries, such as Saudi Arabia and Iran, and others in the Persian Gulf area, that produce 50% of the world’s oil, were currently driving oil prices higher.
South Africa is a net importer of oil and adjusts its fuel price each month to account for changes in the rand exchange rate, the international oil price and government levies.
The department noted that all the average international oil-based product prices had increased, while the average rand/dollar exchange rate also strengthened from R6,77 a dollar to R6,95 a dollar during the past month, forcing government to further up prices.
In addition, motorists using the Gauteng highways could see toll fees as high as 66c/km, coming into play in June this year.