South African motorists could soon face steep fuel price increases, with early data pointing to sharp hikes across petrol, diesel and paraffin in May.
Figures from the Central Energy Fund show significant under recoveries in fuel prices, suggesting that if current trends continue, consumers will feel the impact at the pumps.
Sharp Increases Expected Across Fuel Types
Diesel is expected to take the biggest hit, with a potential increase of close to R10 per litre. Petrol prices could rise by around R3 per litre, while illuminating paraffin may jump by approximately R7.58 per litre.
These increases would place additional strain on households already dealing with rising living costs, particularly lower income families who rely on paraffin for daily energy needs.
Global Oil Prices Driving Costs
The anticipated hikes are largely linked to volatility in global oil markets, particularly fluctuations in Brent crude oil.
Ongoing geopolitical tensions in the Middle East have disrupted supply expectations, pushing oil prices higher and directly influencing local fuel costs.
Inflation Pressure Set To Rise
Economist Frank Blackmore warned that the increases could have a ripple effect across the economy.
He noted that diesel prices could exceed R30 per litre, significantly increasing transport and production costs. This, in turn, is expected to drive up the price of goods and services.
Blackmore estimates that the hikes could push inflation up by around 1.2 percentage points, bringing it closer to 4 percent in the short term, with further pressure expected throughout the year.
Consumers To Feel Wider Impact
Beyond fuel stations, higher diesel costs are likely to affect the entire supply chain. Businesses that rely on transport will pass on increased costs to consumers, leading to higher prices for everyday goods.
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