Petrol price might reach R27 per liter by July

Just when you thought petrol prices couldn’t get any higher, they might, R27 to be exact. New information about the predicted new petrol price by July has been released by Business Insider.

According to figures released this week. It would only take a slight weakening of the rand or a small increase in global oil prices to push the cost of a litre of 95 octane petrol above R27 in South Africa.

Petrol price might reach R27 by July.

Influences of the petrol price

The Central Energy Fund shared details in a mid-month statement. It said that the under-recovery, or the difference between the pump price established earlier this month and the price implied by current market conditions, was little over R2 per litre.

Other factors, including market conditions, go into the final regulated price of petrol. Although under-recovery has historically been a strong indicator of pricing to come.

Unless the policy position of the government on the scheduled phasing-out changes. A temporary tax credit on fuel will be added in July. This will be worth 75 cents on every litre sold.

Extending the tax cut a second time has already been very costly. It has cost the government R4.5 billion in revenue. This is happening at a time when national finances are low in the aftermath of the epidemic. As well as both flood recovery in KwaZulu-Natal and large increases in food prices. These necessitate emergency funds.

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

Therefore any increase in the price of oil. Which can be due to increased demand or new concerns about the impact of Russia’s invasion of Ukraine, or any drop in the value of the rand. These bring influenced by sentiment about developing markets. As well as commodity prices. It will only need to cause a 0.2 percent increase in the petrol price to reach the psychologically significant R27 per litre mark.

In January, a 95 litre inland tank cost R19.61.

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