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Petrol now looks in reach of R27 per litre come July

Business Insider SA
An antique petrol pump in Solitaire, Namibia. (Photo by: VW Pics/Universal Images Group via Getty Images)
An antique petrol pump in Solitaire, Namibia. (Photo by: VW Pics/Universal Images Group via Getty Images)

News analysis

  • Inland buyers could well be paying R27 for a litre of petrol in July.
  • Mid-month numbers suggest petrol prices will have to go up by about R2 a litre.
  • And that is before an emergency tax break is phased out, as is scheduled.
  • For more stories go to www.BusinessInsider.co.za.

It would take just a slight softening of the rand, or a relatively small increase in global oil prices, to push the cost of a litre of 95 octane petrol above R27 in South Africa's inland region, data released this week shows. 

The under-recovery, the difference between the pump price set earlier this month and the price implied by current market conditions, was just over R2 per litre, the Central Energy Fund said in a regular mid-month update.

The government has stressed that other factors go into the final regulated price of petrol – and market conditions could still change – but under-recovery has historically been a good indication of pricing to come.

In July, 75 cents worth a temporary tax break on fuel is due to be added back to the price of every litre sold, unless government's policy position on that planned phasing-out changes.

Extending the levy cut once has already cost the government R4.5 billion in revenue, at a time when national coffers are depleted after the pandemic, while both flood recovery in KwaZulu-Natal and big rises in food costs require emergency cash. 


The combination suggests that petrol prices could jump by R2.78 per litre, on top of the R24.17 per litre paid by everyone outside of the coastal zone.

From there, any increase in the price of oil, either due to an uptick in demand or new fears about the impact of Russia's invasion of Ukraine, or any decrease in the value of the rand, which is subject to sentiment about developing markets as well as commodity prices, need only cause a 0.2% increase for the petrol price to hit the psychologically important R27 per litre mark.

An inland litre of 95 went for R19.61 in January.

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