Petrol price set to increase but diesel may drop

Motorists hoping for what has become a traditional decrease in the price of petrol ahead of the holiday season could be facing up to an 11 cent increase, the Automoble Association (AA) has cautioned.

While South Africa was likely to see petrol price movement early next year, motorists can expect a moderate increase to remain for a while, according to an expert.

Commenting on the unaudited mid-month fuel price data released by the Central Energy Fund (CEF), pointing to a soaring in petrol price, economist Mike Schussler said he found the drop in diesel price “strange”, attributing that to diesel overproduction and the commodity’s winter buying in the northern hemisphere.

“With the exchange rate having improved a bit, we are not likely to see much increase in the petrol price,” said Schussler.

The AA said on Friday said it noted October’s mixed fuel price picture continued into November, with petrol showing an increase and other fuels dropping.

The AA said the underlying fundamentals had been “treading water” in the first half of this month.

This, said the AA, gave rise to a predicted increase of 11 cents a litre for 95 octane petrol and a seven cent rise for 93 octane petrol. Diesel was set to decrease, with current CEF data showing an 18 cent reduction, while illuminating paraffin was expected to drop by 21 cents.

The association said the average rand-US dollar exchange rate “has been flat, contributing a small decrease of about 3.5 cents to fuel prices, as it maintains a level around R14.90 to the dollar”.

The predicted drop in the diesel price meant input costs in manufacturing and agricultural sectors remained “relatively untouched in relation to fuel costs, which is good news”.

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