Expect bigger petrol price increases following government intervention

The government’s decision to stop a full petrol price hike from taking place this month may come back to haunt consumers.

This is according to economist Dawie Roodt, who stated that the energy department and economists use a set formula to calculate the fuel price on a monthly basis.

This takes the international price of crude oil and the value of the rand against the dollar into account.

Energy minister Jeff Radebe said this week that they had taken a once-off decision to only factor in a retail margin increase of 4.9c per litre of petrol for the month.

Without the intervention, prices could have gone up by another 25 cents per litre.

“There is the very real risk that the increases for months to come will be higher than would otherwise have been the case,” said Roodt.

Roodt said he thinks the government has drawn on crude oil reserves that “had been hidden somewhere” or “they had a spare pot of cash somewhere in the ministry” to make the intervention possible.

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Expect bigger petrol price increases following government intervention