Petrol could hit R24/l as astronomical fuel price hikes predicted
The rand's value against the US dollar is nominally impacting the price of fuel locally, as the increase in oil prices contributes 98% to predicted price hikes
As if current record-breaking fuel prices were not enough, petrol is expected to hit the R24/l mark next month.
This is according to the Automobile Association (AA), whose experts predict a R2.15/l price hike for 95 octane petrol, R2.07/l for 93 octane, between R2.94/l and R3.08/l for diesel, and R2.51/l for illuminating paraffin.
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The AA was commenting on mid-month fuel data released by the Central Energy Fund, and predicts petrol to cost around R24/l and diesel R23.60/l.
‘If realised at month-end, these will be the biggest increases to fuel prices in South Africa’s history and will undoubtedly have major ramifications for all consumers and the economy in general,’ said the AA.
‘We must note, though, that this is the mid-month outlook, and oil prices are, for the moment, see-sawing significantly so there may yet be some relief before the official adjustment by the Department of Mineral Resources and Energy going into April.
The AA said the main driver behind the increases is the movement in international oil prices which have soared to record levels in recent weeks owing to the conflict in Ukraine and concerns over Russian oil supplies.
Russia is the third-highest producer of crude oil, and supply worries are seen in increased oil prices.
‘Based on the current data, the increase in oil prices is contributing 98% to the predicted price hikes, with the rand – which stabilised around R15.11 to the US dollar – contributing the other two per cent,’ said the AA.
‘Effectively, though, the rand’s value against the US dollar is nominally impacting the price of fuel locally.
‘We are seeing record fuel prices around the world as the high oil prices exact their toll in every market. Locally, there is little to cushion the blow for millions of South Africans who are struggling to cope with a fragile economy which is hurting their personal financial situation.
‘Consumers should brace themselves and prepare for what is likely to be a long winter if the conflict in Ukraine is drawn out,’ concluded the AA.
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