Brace up for another fuel price hike – AA tells South Africans

According to unaudited data from the Central Energy Fund (CEF), South Africans should brace themselves for additional fuel price misery in October, according to the Automobile Association (AA).

According to the AA, current data indicates an R1.20/l increase in the wholesale price of petrol and an R2/l increase in the wholesale price of diesel. Illuminating paraffin is also expected to rise further, with data showing an under recovery of R1.84/l.

“Should these significant increases materialise they will push fuel prices to levels last seen in July last year, stretching the personal finances of South Africans even further. Higher fuel prices will invariably lead to higher prices at the till, which will be a blow to many who are already experiencing financial distress,” says the AA.

According to CEF data, the main driver of possible rises is increased international oil prices, which have risen significantly since August, owing primarily to restricted supply by major oil-producing nations.

Higher oil prices can account for up to 80% of the increase in petrol costs, while they can account for up to 86% of the predicted increase in diesel prices. According to the AA, the weaker rand/US dollar exchange rate is adding to the hikes, but its impact is minor in comparison to rising oil prices.

Motorists were stung with an R1.71/l increase in the retail price of petrol at the beginning of September. The wholesale price of high sulphur 0.05% diesel increased by R2.84/l, while the wholesale price of low sulphur 0.005% diesel increased by R2.76/l.

“The outlook is certainly bleak, though it has improved a little since the beginning of the month. With two more weeks before the official adjustment for October is made, South Africans will be hoping the downward trajectory continues. Though increases are now a certainty for October, the question will be by how much fuel prices will ultimately rise,” says the AA.

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