The June petrol price increase will be the biggest on record, and fears are growing about the potential impact it may have on South Africa’s economy.
UPDATE: This article was updated with the Department of Energy’s announcement of an extension in the fuel levy relief for a further two months. – Tuesday, 31 May 2022.
“”Due to this significant monthly price increase, the Minister of Finance has today submitted a letter to the Speaker of the National Assembly, requesting the tabling of a two-month proposal for the extension of the reduction in the general fuel levy. Unlike the previous announcement, this proposal is expected to have an impact on the fiscal framework, as it will not be fully funded through a sale of strategic oil stocks,” the statement reads.
June 2022 petrol price increase will be impacted by govt levies
Motorists will be piling at petrol stations across the country before the clock strikes midnight on Tuesday, in a bid to fill up tanks ahead of what’s touted to be the highest petrol price increase in recent history.
Currently, the price of petrol, depending on where you pour it, can either cost R21,09 (coastal) or R21,89 per litre. If the government does not intervene before Wednesday, then more than likely, motorists may have to fork out in excess of R25 per litre for petrol.
According to the Central Energy Fund (CEF), adjustments to the petrol price for June 2022 are in line with the increase in Brent crude oil prices which, on Tuesday, was trading at $123,80 per barrel.
In addition, South Africa’s currency continues to struggle in the markets, making it near impossible to avoid a rise in fuel prices in June 2022.
However, the Department of Energy may be responsible for the record highs expected at the pumps, after its two-month reprieve of the R1,50 general fuel levy reduction is set to expire on Tuesday.
This means that, in addition to other taxes and levies, the government will add an extra R3,93 to the base fuel price to mark up the cost of petrol at the pumps.
Here are the costs that drive up the price of petrol in South Africa
According to a report published by Statistics South Africa in December 2021, the final petrol price consists of four elements:
- Basic fuel price
- Taxes and levies, made up of the general fuel levy (R2,43), the Road Accident Fund levy (R2,18) and others;
- Retail and wholesale margins; and
- Storage and distribution costs
Based on data from the CEF, updated on Thursday 26 May 2022, the forecasted base fuel price, without the addition of levies, margins and storage costs, for June 2022 is estimated to be:
- 95 unleaded: R18,33
- 93 unleaded: R17,68
- 0.05% diesel: R16,64
- 0.005% diesel: R16,75
June 2022 petrol price: Here’s how much a litre may cost
Considering the above, here is the forecasted petrol price per litre for June 2022, with levies, margins and storage costs added (estimations include the reduction of R1,50 to the general fuel levy):
Inland
- 95 unleaded: R24,17 p/l
- 93 unleaded: R23,94 p/l
- 0.05% diesel: R23,09 p/l
- 0.005% diesel: R23,22 p/l
Coastal
- 95 unleaded: R23,42 p/l
- 93 unleaded: R23,29 p/l
- 0.05% diesel: R22,44 p/l
- 0.005% diesel: R22,57 p/l