Motorists are warned not to spend too much during the December holidays as fuel prices are expected to increase substantially at the beginning of 2017.
The Automobile Association (AA) was commenting on unaudited mid-month fuel price data that was released by the Central Energy Fund (CEF) recently. The first fortnight of December showed a strong appreciation in oil prices, but the rand remained volatile and unstable against the US dollar.
The AA said that fuel prices, based on the current data available, might increase by as much as 27 cents per litre for petrol, 21 cents per litre for diesel and 28 cents per litre for illuminating paraffin.
“Saudi Arabia has indicated that its crude oil production cuts may go beyond those proposed in November,” the AA said.
“There are also signals that non-OPEC members may voluntarily decrease production, which has the potential to further increase international petroleum prices,” the AA said. They also warned consumers that the impact of production cuts has not been factored into current oil prices.
The association said that if the oil-producing countries do adhere to the proposed production cuts, the oil price would likely go up. This will continue until demand and production have levelled out again.
According to the AA, a stronger rand can be overshadowed by a sharp climb in the oil price, which can lead to a potential succession of fuel price hikes, impacting the economy strongly over the next few months.
January’s prices at the pumps could be as follows (wholesale for diesel):
– 93 octane petrol could increase to R12,86 per litre (currently R12,59)
– Diesel (wholesale) could increase to R11,24 per litre (currently R11,03).
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