South Africans face fuel price surge as levy concession ends

SOUTH Africans face record high gasoline prices in June as a subsidy to help motorists counter the impact of high crude costs exacerbated by Russia’s invasion of Ukraine comes to an end.

With a weighting of almost 5% in South Africa’s inflation basket, the expected jump in pump costs is likely to push the gauge above the central bank’s target range and spur price hikes across the economy. The government reduced the levy on fuel by 40% in April and May, helping to keep a lid on prices.

“We understand that it’s because of the war between Ukraine and Russia, but we are going to also have to increase taxi fares and customers are going to start fighting us because we have been increasing prices for people who aren’t getting anything from their jobs,” said Dumisani Vilakazi, a minibus-taxi driver in Johannesburg.

Absa Group economists estimated in a research note