Fuel Price Hike to Strain South African Households
The upcoming fuel price hike in South Africa will strain household finances, increasing transport and goods costs, worsening inflationary pressures.
South African households face another sharp increase in fuel prices, expected to take effect on October 7. This rise will likely strain household finances further, as higher transport costs are anticipated to increase the prices of goods and services, worsening inflationary pressures.
Fuel price hike details
The latest Central Energy Fund (CEF) figures suggest a potential increase of approximately R3.18 per litre for petrol. Diesel prices are projected to rise by around R2.80 for 500ppm diesel and R3.15 for 50ppm diesel.
If these estimates hold, 95 Unleaded could reach roughly R29.23 per litre at the coast and R30.10 in Gauteng. The price of 93 Unleaded in Gauteng might rise to about R29.94 per litre. Diesel prices are also expected to surpass the R34-per-litre mark at the coast and R35 inland for 50ppm diesel, once retail margins are included.
Impact on consumers
Investec chief economist Annabel Bishop warns that this jump could push consumer price inflation (CPI) toward 5.0%. She also raises the possibility of another interest rate increase in November. Bishop notes that the prolonged rise in oil prices is putting pressure on consumers’ real incomes.
The impact becomes clearer when calculating fuel costs per kilometre. For a small vehicle using around 5.5 litres per 100km, the cost of fuel was about R1.11 per kilometre in March. This increased to roughly R1.47 by September and could reach approximately R1.65 in October if projections hold.
A compact SUV consuming about 8.0 litres per 100km saw its fuel cost rise from around R1.61 per kilometre in March to R2.14 in September. The projected October figure reaches about R2.40. Diesel bakkie owners face an even larger increase, with costs rising from roughly R1.89 per kilometre in March to R3.16 in September and further increases expected this month.
Government response
South African motorists typically travel between 1,500km and 1,800km monthly, so the additional expense adds up quickly. For instance, fuelling a small car like a Suzuki Swift for 1,500km cost about R1,666 in March. By September, the same distance cost roughly R2,208, while the projected October price could push the monthly fuel bill to approximately R2,470.
For a compact SUV like a Chery Tiggo 4, covering 1,500km cost around R2,423 in March and rose to about R3,211 in September. At the projected October fuel prices, the same journey would cost roughly R3,593.
The government has not announced plans for temporary fuel tax relief similar to the measures introduced in April, when the General Fuel Levy was reduced by at least R3 per litre for two months. Mineral and Petroleum Resources Minister Gwede Mantashe stated last month that there are no immediate plans to provide relief to households and businesses facing higher fuel costs.
