Finance Minister Pravin Gordhan, during his Budget speech on Wednesday, announced a 39 cents a litre increase in fuel taxes, set to be tacked on to pump prices from April 5, but motorists should at least experience some relief before then as a moderate fuel price decrease is looking likely for March.
A rather encouraging sign is that for the past week, the daily fuel price over-recovery, according to Central Energy Fund data, has exceeded 20 cents a litre (even hitting 40 cents on Wednesday), thanks largely to a strong rand and lower oil prices. However, an under-recovery situation earlier in the month means that the average for the month up to 22 February points to a mere 5.7 cent decrease, which could grow slightly as there is still one more day (23 February) that will be taken into account in next month's fuel price calculation.
In fact, if the rand and international oil price interplay continues on the current positive trajectory through March, it will certainly help erode April's 39 c/l sting and perhaps even eliminate it. As always, much can happen between now and then, and if there’s any truth in the rumours of an upcoming cabinet restructure that ousts Gordhan, then it’s almost certain that the rand would plunge and send fuel prices surging.
Either way, April will see fuel taxes rise by 39 cents a litre, of which 30 cents goes to the general fuel levy and the remaining 9c to the embattled Road Accident Fund.
95 Unleaded petrol currently retails for R13.62 in Gauteng and R13.14 at the coast, while diesel (0.05) prices stand at R11.62 and R11.24 respectively.