The cost of driving in South Africa has increased significantly since March, and motorists will be dealt another blow in October. Current projections point to fuel price hikes of more than R3 for most fuel types. According to month-end data from the Central Energy Fund, petrol price increases of around R3.08 for 93 Unleaded and R3.29 for 95 Unleaded are expected, while diesel is looking set to rise by between R2.80 for 500ppm and R3.15 in the case of 50ppm.
The government is unlikely to intervene with temporary tax relief measures, as it did in April this year, when the General Fuel Levy was cut by at least R3.00 per litre for two months. Mineral and Petroleum Resources Minister Gwede Mantashe stated that there were no immediate plans to cushion households and businesses from rising fuel costs. Following the increases, motorists can expect to pay around R29.23 for a litre of 95 Unleaded petrol at the coast and R30.10 in Gauteng, where 93 is expected to retail for around R29.94.
The price hikes have significant implications for the average budget. Calculations show that even an entry-level car will cost over R1,000 more to fuel, versus March this year, if you travel around 2,000km per month. A small car with average consumption of 5.5 litres per 100km would have cost around R1.11 per kilometre in fuel costs in March, but by September that would have risen to R1.47 per kilometre. If October’s projections ring true, that number will swell to R1.65.
The impact of the fuel price hikes will be felt across various vehicle types. A compact SUV that consumes 8.0 l/100km would have risen from R1.61 earlier in the year to R2.14 in September, with a cost of around R2.40 projected for October. For diesel-powered vehicles, such as a bakkie, which consumes around 9.0 l/100km, the cost per kilometre would have risen from R1.89 in March to R3.16 in September.
The estimated average monthly driving distance in South Africa is between 1,500km to 1,800km. Based on this, fuel costs for a small car, such as a Suzuki Swift, would have risen from R1,666 in March to R2,208 in September and are expected to peak at R2,470 in October. For an SUV, such as the Chery Tiggo, fuel costs would have risen from R2,423 in March to R3,211 in September and R3,593 in October.
The future of fuel prices remains uncertain and is largely dependent on the prospects of peace in the Middle East. Oil prices remain elevated due to fears of disruptions to global crude supplies and shipping. The Strait of Hormuz is a particular concern, and any attacks or heightened tensions in the region can increase insurance, shipping, and supply-risk costs.
Key points
- The fuel price hikes are expected to have a significant impact on the average budget, with costs rising by over R1,000 per month for some vehicle types.
- The government is unlikely to intervene with temporary tax relief measures to cushion households and businesses from rising fuel costs.
- The future of fuel prices remains uncertain and is largely dependent on the prospects of peace in the Middle East.
