An increase in the price of fuel and electricity

April Fools Day is lasting longer than one day for South Africans with the petrol and electricity prices set to increase.

First, motorists ought to buckle up as the petrol price has just increased for the third consecutive time in the last 3 months. And second, electricity prices are also set to increase.

Motorists can no expect a fuel price increase of 65 cents per litre for 93 unleaded petrol (inland). And, 95 Unleaded (inland) will see an increase of 67 cents per litre. Coastally, the increases for petrol 93 will be 58 cents per litre, and petrol 95 increasing by 60 cents per litre.

Diesel prices will increase inland, while coastally they will decrease. See a full breakdown of the new price of petrol in this BusinessTech article here. 

*Fuel products include petrol, diesel and illuminating paraffin.

What are the factors that influence the price of fuel in South Africa?

The Department of Mineral Resources and Energy controls the price of the fuel in South Africa. There are, however, both international and local factors that influence the price of fuel in South Africa. Internationally, the Basic Fuel Price (BFP) is what it would cost a South African importer to buy petrol from an international refinery and transport it to South Africa. This price is largely dependent on the international price of crude oil (average international product pricing) and the R/$ exchange rate.

The local or domestic factors that contribute to the price of fuel are:

• One third of the price of fuel is comprised of levies and taxes. This is mostly comprised of the general fuel levy which is a tax on every litre of fuel and the Road Accident Fund (RAF) which is the money (fund) that gets given to motorists who are involved in accidents. 
•  Wholesale and retail margins
• Storage and distribution costs

What causes petrol increase in South Africa?

The reason the fuel price may fluctuate every month is because the Basic Fuel Price (BFP) could experience fluctuations. Whereas the period under review for the general fuel levy and RAF levy only take place once every year.

How does the increase in the price of fuel affect you?

 Beyond it just costing more to fill up your tank, an increase in the price of fuel could have knock-on effects like:

• Retailers and business will likely try and absorb these costs for transportation into the costs of their goods and services so consumers will feel these costs at the till. 
• An increase in the price of fuel may have a negative impact on inflation which could have a further negative impact on already high interest rates.  

Electricity prices will also increase

Not only have fuel prices increased, South Africans are set to see an increase in the price of electricity too. 

The National Energy Regulator of South Africa (NERSA) approved an Eskom tariff increase of 12.74% which will take effect from this month (April 2024) for Eskom customers and probably by July 2024 for municipal customers.  

If you are an Eskom customer currently spending around R700 for your electricity bill, with the new electricity tariff increase you can expect to pay around R790.

If you are municipal electricity consumer in Cape Town currently paying around R700, you can also expect to pay around R790 when the increase is in effect.

Can't cope with the increased pressure of the cost of living?

You do have a way out if you are battling to keep up with the constant increases with the cost of living. Your way out is with debt counselling (debt review) at Meerkat.

With debt counselling at Meerkat we can reduce your monthly debt instalment by up to 50%. We even negotiate with your creditors to reduce the interest rates on your loans which could end up saving you money in the long-run!

Interested in finding out more about how debt counselling works in South Africa? Read this blog post.

Who is Meerkat?

Meerkat is a financial wellness company that helps South African consumers do MORE with their money. We do this helping South Africans with debt repayment negotiations, providing affordable insurance and helping them kickstart an emergency fund!

Fill in the contact form on our website to receive a free callback from the Meerkat team today.