The cost of travel per kilometer has significantly increased since March. In addition to a substantial rise in fuel prices in September, drivers and passengers in South Africa face another shock in October, as current forecasts indicate an increase of more than 3 rand for most types of fuel.
Data obtained by the Central Energy Fund at the end of the month shows that the price of 93 Unleaded gasoline rose by approximately 3.08 rand, and 95 Unleaded by 3.29 rand. Furthermore, diesel fuel is expected to increase in price by an amount ranging from 2.80 rand for 500ppm to 3.15 rand for 50ppm.
Currently, it is unlikely that the government will intervene with temporary tax relief measures, similar to what was done in April this year when the General Fuel Levy was reduced by at least 3.00 rand per liter for two months. Minister of Mineral Resources and Energy Gweed Mantshe stated last month that there are no immediate plans to mitigate the impact of rising fuel prices on households and businesses.
Following these increases, which will take effect on Wednesday, October 7th, drivers can expect the price of 95 Unleaded gasoline on the coast to be around 29.23 rand, and in Gauteng—30.10 rand. These calculations assume no support measures and an average of two gasoline grades at 3.18 rand per liter. Diesel fuel at 50ppm may also exceed 34 rand on the coast and 35 rand inland after accounting for retail markups.
This means that for the first time, most residents of South Africa will pay more than 30 rand per liter of fuel.
Even an inexpensive car, such as a Suzuki Swift, could cost 1000 rand more per month to operate. IOL calculations show that even for a basic car, fuel costs will increase by more than 1000 rand compared to March of this year if driving about 2000 km per month.
A small car with an average consumption of 5.5 liters per 100 km cost about 1.11 rand per kilometer in March of this year, but by September, this figure rose to 1.47 rand. If the October forecasts materialize, this amount will increase to 1.65 rand.
A compact SUV consuming 8.0 L/100km increased its cost from 1.61 rand at the beginning of the year to 2.14 rand in September, with an estimated cost of about 2.40 rand for October.
The situation worsens when using a diesel pickup that consumes about 9.0 L/100km. In March, the cost per kilometer was 1.89 rand, and by September, this amount reached 3.16 rand, which is 28 cents more than the previous month.
It is estimated that the average driver in South Africa covers between 1500 and 1800 km monthly. If driving 1500 km per month in a small car like a Suzuki Swift, it cost 1666 rand in March, 2208 rand in September, and is likely to reach 2470 rand in October.
In an SUV such as a Chery Tiggo, with a consumption of 8.0 L/100km, fuel costs have risen from 2423 rand (March) to 3211 rand (September) and will amount to 3593 rand (October).
An example with a Toyota Hilux, consuming 9.0 L/100km, showed an increase from 2849 rand (March) to 5760 rand (September) for a distance of 1500 km per month, and it will reach 6327 rand (October), which is almost 2000 rand over seven months.
Will these catastrophic fuel costs last forever? A large part depends on Middle East world prospects. Oil prices remain high mainly because the war in the Middle East has heightened concerns about disruptions in global crude oil supplies and shipping. The Strait of Hormuz is a particular concern, as a significant portion of global oil passes through this narrow waterway, and attacks or increased tensions in the region could increase insurance, transport, and supply risks.