Motorists are bracing themselves for a petrol price hike due this week. From Wednesday, (6 February 2013) the petrol price will go up by 41 cents a litre according to the Department of Energy, while the cost of diesel will go up by 17.08 cents a litre.
Commentators predict that this will be the first of many petrol price increases that consumers will see this year. This month, motorists will suffer more thanks to the predicted increases in the fuel levy, which is likely to be announced in the Minister of Finance’s budget which will further add to the cost of motoring and also transportation of commodities.
“From a transportation point of view, 2013 is set to become a very expensive year for the consumer. Indications are that not only will the cost of fuel be higher this year, but the increased cost of vehicle licensing and toll fees will significantly add to the transport burden of the motorist,” said Gary Ronald, head of public affairs at the AA.
No way out
The AA has in the past provided sound advice on how motorists can adapt their driving behaviour to save more on petrol but other than using these tactics (click here) there’s not much motorists can do to curb the costs.
“Car pooling can help and is an option for those that can do it. People can also downscale to get a more fuel efficient car but not many people can afford to do that,” said Ronald.
Ronald added that the price hikes and pressure from consumers may compel the government to find a fuel efficient alternative. However, when asked about electric vehicles he pointed out that again consumers are put on the back foot thanks to the potential 16% price hike that Eskom is seeking over the next five years. “Electric cars are still expensive. If you can buy one it may save you money but if Eskom gets its way it may not,” he said.
Reasons behind the hike
The debt crisis and the Rand/Dollar exchange rate were cited as reasons for the latest hike in petrol prices. “During the current fuel price review period (27 December 2012 to 31 January 2013), the average Brent crude oil price increased, compared to the previous fuel price review period. The uncertainty surrounding the debt crisis in the United States and the fact that Saudi Arabia cut crude oil output by 650,000 b/d over the past couple of months to reduce surplus supply in the market contributed to higher crude oil prices,” said Thandiwe Maimane, Spokesperson for the Department of Energy.
Maimane added: “Since the 4th of January 2013, the Rand/Dollar exchange rate deteriorated and peaked at R9.06 per US Dollar on 24 January 2013. The deterioration in the Rand against the US Dollar contributed to an increase in the fuel prices by 1.16 c/l.”