Johannesburg - A weaker rand and stronger international oil prices are setting South Africa up for a substantial fuel price increase in November.
The latest data from the Central Energy Fund showed an average under-recovery of 46 cents a litre for petrol and 64 cents a litre between 1 and 14 September, pointing towards increases in that region should crude prices and the currency remain stable.
However, the daily under-recoveries of between 50 and 55 cents recorded for petrol in the last few days, following the rand's depreciation after Finance Minister Pravin Gordhan was summoned to court on fraud charges, are a sign that motorists could be looking at an increase of over 50c unless the currency strengthens between now and the end of the month.
International oil prices are also on the rise. Commenting on the mid-month fuel data, the Automobile Association stated that there had been upward pressure since Opec resolved to cut oil production, with international petrol prices rising from 136 US cents per gallon to 148 cents since September 27. Furthermore, the political situation surrounding Gordhan in SA is expected to put more pressure on the local currency:
“Our hope is that matter will be brought to a swift conclusion to reduce the tensions our markets are currently experiencing, and to bring more stability to our economic outlook. This is essential to minimise further weakening of the rand, which directly affects the price South Africans pay for imported commodities such as fuel.”
95 Octane petrol currently retails for R12.12 at the coast and R12.60 in Gauteng, while 0.05ppm diesel sells for between R10.33 and R10.71. This follows increases of 44 cents for petrol and 23c for diesel at the beginning of October.
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