By Bahle Gama
THE Central Energy Fund (CEF) has advised motorists to brace themselves for another petrol hike despite the positive moves for global oil prices.
According to the CEF’s latest data, petrol prices are expected to increase by about 35 cents per litre from May 1, while diesel prices will likely drop around 30 cents per litre.
Due to the geopolitical tensions and OPEC+’s supply cuts, oil is still around 12 per cent higher this year tightening the market, even though tensions appear to be dissipating.
Bloomberg reported that analysts noted that an ‘uneasy calm’ has descended over the market after prices whipsawed on Friday, with Iran downplaying Israel’s response to the Islamic Republic’s unprecedented drone and missile strike a week earlier.
ALSO READ: World reaction to deadly shooting…
In reaction to these projections, Eswatini’s Ministry of Natural Resources Communications Officer Sikelela Khoza said the Ministry through the Energy Department conducts monthly monitoring and reviews on fuel prices, guiding on which direction to take.
“Therefore, the Ministry will alert the public through your esteemed publication to the likelihood of fuel adjustment in May,” Khoza said.
Bloomberg reported that the under and over-recoveries in fuel prices have experienced a volatile week in both the global oil and forex markets with the former swinging wildly on uncertainties around tensions in the Middle East.
At the start of the past week, oil prices have reportedly calmed significantly as some of the premium from tensions in the Middle East continued to fade from the market.
Addressing the tensions last Monday, Tehran said Israel had received the necessary response at this stage.
According to Bloomberg, prices are still way off from the US$75 a barrel start to the year as it is currently around US$86 a barrel, contributing to significant under-recoveries for local petrol prices.
The Rand on the other hand is reportedly contributing to positive recoveries for fuel prices with the weaker Rand being above E19 to the dollar.
ALSO READ: Knockout blow for motorists as…
The Rand traded weaker last Monday at E19.09 to the dollar, having hit above E19.20 at the close of last week.
BusinessTech reported that the SA unit was trading lower as emerging market assets came under pressure on the back of heightened global risk aversion.
“Petrol prices have climbed by a net E1.80 so far this year which increased in February, March, and April after starting the year off with a decent 76 cents per litre cut in January,” reported BusinessTech.
CEF predictions show that another 35 cents per litre hike in May will take this up to E2.15 and push 93 petrol prices back above E25 per litre.
This means that the inflationary pressure attributed to petrol price hikes is likely to continue.
