By Leah Falcon, Victoria West-Russell and Julian Rael Gordon
South African motorists and commuting Maties can expect high fuel price increases from 1 April. This is on top of the March fuel-price update from the Minister of Mineral and Petrol Resources, Gwede Mantashe.
The end-March speculation for fuel prices are based on data by the Central Energy Fund (CEF). On 1 April, there will be an additional levy of 21 cents per litre on fuel on top of the price predicted by the CEF and the Department of Mineral Resources and Energy (DMRE). Yet, to ease some pressure, on 31 March, finance minister Enoch Godongwana announced he will be “lowering the fuel levy for this month of April by R3”. Fuel prices on 1 April will rise by up to R3,06 per litre for petrol and R7,37 per litre for diesel.
Fuel pump at the BP fuel station on Dorp Street, Stellenbosch. Petrol prices are seeing a record high increase on 1 April due to rising oil prices as a result of the Middle Eastern conflict between the USA and Iran. Photo: Emma Giles
Increasing fuel prices will directly impact many Stellenbosch University (SU) students. Die Matie reached out to some students to understand the extent. Kaitlin Van der Bijl, a third-year BA (Law) commuter student from Somerset West, said, “Even in my privileged position of being able to afford petrol, I am so stressed about it […]. The flow of traffic in Stellenbosch doesn’t help at all. All the stop-starting wastes so much petrol.”
Dominic Hoole, BAHons (Visual Communication Design), reiterated these fears, saying, “Sometimes I go home to Fish Hoek, and to go from Fish Hoek and back, that is a lot of petrol. […] If I paid R700 before, I just feel absolutely fearful of what it is going to cost now.”
The CEF and DMRE predict and adjust fuel prices, respectively based on a number of factors, including the global crude oil price and international petrol product prices. Moreover, they are currently influenced by the USA-Israel-Iran conflict. Since the USA and Israel bombed Iran on 28 February, the cost of oil per barrel has increased from below $60 to $105 at the time of writing.
The Middle Eastern conflict is particularly influential as the Strait of Hormuz – controlled by Iran – has effectively been closed since early March. About a quarter of the world’s oil passes through it daily and the closure of the Strait has resulted in the spike in the price of crude oil and related petroleum products.
In an interview with Die Matie, a woman who commutes into Stellenbosch everyday for work and who wishes to remain anonymous explained that taxi fares “normally increas[e] by R2 every time the petrol price goes up”. She emphasised that this affects many workers in Stellenbosch, “seeing that most of [the workers are] not situated in Stellenbosch. Some of us [are] coming from Delft, Mitchells Plane, Eerste Rivier, so every time when the taxi prices increase, it [does] affect us daily.” However, leading up to 1 April, the Cape Amalgamated Taxi Association (CATA) has decided not to increase prices for commuters. CATA secretary, Nkululeko Sityebi, said the decision is to be “reasonable and look at our commuters and consider them”.
Fuel station at the BP on Merriman Avenue in Stellenbosch. Diesel prices see an increase of R7 on 1 April. Photo: Leah Falcon
Die Matie spoke with the Director of Merriman BP Service Station, Jamie Amner, to understand the forthcoming increase in fuel prices. Amner said that the petrol price “is determined by government. So there’s no fluctuation there.”
For diesel, the wholesale prices are given first and then “dealers add margin”. Amner added, “The further away you go from the depots, the higher the [diesel] price goes.” In line with this, Stellenbosch has slightly higher diesel prices compared to central Cape Town. Amner explains that fuel prices go up at “midnight on the first Wednesday of each month”.
Fluctuations in the Rand/US Dollar exchange rate and rising oil prices take some time to reflect whilst calculations happen by the DRME. “[DMRE is] looking backwards and retrospectively correcting the number to make up for or give back to some of the gains of the previous period,” Amner explains.
Leading up to the increase on 1 April, there is the “need to recover those losses, so that’s why [they’re] expecting such a big [increase] this time round”. For customers, “people’s habits will change; they might drive less,” Amner added.
