Hefty fuel price increase predicted

AFTER a slight reprieve earlier this month, motorists are likely to be in for a hefty petrol price hike in November.

Commenting on recent exchange rate and commodities data, the Automobile Association (AA) predicts a 99 cents per litre rise in the petrol price, with diesel and illuminating paraffin expected to be higher by a whopping R1.42 a litre.

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‘The hikes in diesel and illuminating paraffin would be the largest in South African history, bearing in mind that this is only based on half a month’s data.

‘R20 a litre for petrol is now a realistic scenario before the end of 2021,’ said AA spokesperson, Layton Beard, who said there is little hope of improvement before the end of October.

The expected increases will push 95 unleaded petrol (ULP) inland above R19 per litre (close to R19.30/l), and R17 per litre for diesel.

Taking this potential increase into account, the price of a litre of fuel inland (95 ULP) will have increased from R14.86/l in January to R19.30/l in November – a 30% increase over 11 months.

‘Brent crude has broken through the 85 US dollars per barrel mark and the basket of oil prices used to calculate South Africa’s oil prices are following Brent higher.

‘We note the concern this is generating in the USA, where President Biden was reported to have called on the OPEC cartel to increase oil output to stabilise prices.

‘This has not generated a response from OPEC, and our view is that a response is not likely, since the current price pressures are beneficial to the cartel’s members,’ said Beard.