South African consumers have been hit hard in the last few months with unrelenting fuel price increases and for the first time, motorists are now paying over R21 per litre of fuel.
However, the fuel price crisis is expected to worsen considerably following the current Russia-Ukraine conflict which is deepening by the day.
The Russia-Ukraine conflict has forced governments and energy companies to reassess their energy relationship with Russia and many are shunning Russian oil, resulting in shortages across the board along with sharply rising oil prices.
International oil prices and the South African Rand’s performance against the US dollar are key factors that determine the monthly fuel price adjustments.
On 24 February 2022, the Brent Crude oil price was recorded at $95.42 per barrel. This was the same day that Russia undertook its military action in Ukraine.
As of today, 8 March, the Brent Crude oil price is currently sitting at $126.88 per barrel, after reaching highs of over $130 per barrel earlier this week. Surging oil prices are expected to remain in the short term as the conflict continues and some experts are even predicting higher prices to come.
Over the same period, the Rand has performed poorly against the US dollar and is currently trading at R15.29.
Provided that these conditions persist, these two factors will have a devastating effect on fuel prices in South Africa in April 2022.
It’s been reported elsewhere that increases of over R2 per litre can be expected for April 2022.
Fuel price increases have a severe impact on farming and increases will have a negative impact on food prices, putting more pressure on already stretched household budgets. More so, the price of fertiliser has soared by as much as 70% and Russia is a major exporter of fertiliser worldwide.
The unaudited mid-month data released by the Central Energy Fund (CEF) is expected next week and will paint a clearer picture of what’s to come.
This article was originally published on Cars.co.za.
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