Motorists in Stellenbosch fear the impact of the confirmed fuel price increase in April. Early data has indicated that the price of petrol and diesel will rise significantly.
In South Africa, petrol prices are regulated by the government, while diesel prices are guided by wholesale benchmarks which could see prices vary from retail to retail on Wednesday, 1 April. PHOTO: Adobe Stock/ Scharfsnn86
The petrol price increases for the month of April have been announced on 31 March as follows: R3.06 for both 93 and 95 octane petrol per litre, diesel 0.05% (wholesale) by R7.37 per litre and diesel 0.005% (wholesale) by R7.51 per litre.
According to the latest projections from the Central Energy Fund (CEF), 95 octane petrol is expected to increase by between R4.50 and R5.41 per litre, with a smaller increase expected for 93 octane. The price of diesel, which is not regulated at retail level, has already begun rising at some filling stations, with expected wholesale adjustments of R10 per litre.
The hikes were driven by the escalating conflict in the Middle East, which is a major oil producing region. Chief Economist at Investec, Annabel Bishop told BusinessTech that there was a concern in the South African markets about how long shipping in the Strait of Hormuz would be disrupted. This disruption is contributing to the increase in oil prices.
At the same time, the weakening rand has made imported fuel more expensive for South Africa, which relies on international fuel supplies.
Lundi Saunders, a Stellenbosch fuel retailer, told SMF News on the 20th of March that there has been no official communication of a price adjustment yet, but uncertainty has already begun influencing customer behavior. “There has been an increase in commuters opting to fill up their vehicles more frequently, as well as customers purchasing fuel in approved containers in anticipation of a possible price increase,” he said.
He added that this pattern is typical when speculations around fuel price hikes grow, as consumers try to maximise value before new prices take effect.
SMF News reached out to Saunders again on the 31st of March to confirm whether he had received any official communication of a price adjustment and in response he explained that the price adjustment of diesel is currently projected at around R7 a litre, while petrol in coastal areas is looking at an adjustment of about R3 a liter.
A petrol attendant fills a vehicle at a filling station in Stellenbosch. Some motorists have started filling their tanks more frequently due to potential fuel price increases. PHOTO: Supplied/ Bulela Sikithi
Despite concerns about global developments, Saunders said on the 20th of March that the supply in Stellenbosch remains stable. “Our procurement and logistics and structure remain stable, we do not anticipate any immediate disruptions to supply or service delivery. We continue to monitor the situation closely to ensure business continuity for the Stellenbosch community,” he said.
For students who rely on their own vehicles to make it to campus every day, the possibility of another increase adds pressure on already tight budgets. Rising fuel costs are becoming increasingly difficult to manage, a postgraduate student at Stellenbosch University, Thapelo Mawanga said. “Petrol already makes up [some of] my biggest expense in the month. If it goes up again, I will probably have to cut down on other things or find another means of getting to campus,” he said.
Saunders noted that while customers often fill their tanks more completely ahead of a fuel price increase, spending habits usually shift only after the adjustment takes place.
“Historically, once a price increase takes effect, consumers tend to become more cautious with their spending. This often results in reduced travel, greater reliance on lift clubs or public transport and more deliberate decision making around day-to-day activities,” he said.
Fuel stations continue to operate as normal as motorists await the official fuel price increase announcement. PHOTO: Supplied/ Bulela Sikithi
However, for some residents, reducing travel is not an option. Shaun Daniels, a Stellenbosch resident who travels regularly for work and events, said he is currently spending about R4 200 on petrol a month. “Fuel prices have never really bothered me. Not that I have all the money in the world, but I don’t have a choice. Walking is not an option,” he said. Daniels added that if fuel prices increase, he will likely pass the additional costs to his clients as opposed to reducing his travel. “With the events that I do, I will just have to increase my travelling cost on the client.”
Fuel price fluctuations are a regular occurrence in South Africa, but industry observers among them being analysts at CEF as well as industry bodies such as the Fuel Industry Association of South Africa, warn that the scale of the impact would be bigger than usual if the current projections materialise.