Fuel price news at lunch

File picture: Neil Baynes

File picture: Neil Baynes

Published Oct 2, 2015

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Johannesburg - South African consumers will have to wait until around lunch time to find out whether their pockets will be further squeezed this month.

That is because the Department of Energy will announce then whether it will hike petrol and diesel prices.

If - as the Automotive Association of SA anticipates - fuel prices are put up, this will hurt heavily indebted consumers who are already battling to make ends meet.

The Central Energy Fund’s latest over- and under-recovery figures from Thursday show the department was under-recovering on 95 octane by 4.9c, and over-recovering on 93 octane by 0.9c a litre.

For diesel, the department is under-recovering by between 53c and 51c a litre depending on the grade.

The AA said on Wednesday that it expected diesel will increase by around 52 cents a litre, with illuminating paraffin up by 49 cents.

“Petrol will see only minor changes, with a drop of around two cents a litre forecast for 93 unleaded, and a rise of four cents for 95 unleaded.”

The association says the increases come despite recent low oil figures and are a factor of the weak rand.

The currency hit a peak of R14 to the dollar on September 7 before retreating to R13.20 by September 18, only to give up this gain and return to the R14 level on September 29.

“This month's rand weakness has taken its toll – without it, the petrol price would be down by nearly 30 cents a litre, and the diesel price increase would be limited to around 20 cents a litre,” the AA noted.

At the beginning of September, both octanes of petrol came down by 69c a litre, while diesel dropped between 54c and 51c a litre.

Illuminating paraffin (SMNRP) and illuminating paraffin (wholesale) came down by 55c a litre and 74c a litre, respectively.

LP Gas will be 115c/kg cheaper.

The decline was thanks to the continued drop in crude oil prices during the period.

However, the weakening rand had reduced the over-recovery on the basic fuel price by more than 20c/litre.

The drop marked the second consecutive month that has seen fuel prices drop.

Should the price increase, it will come at a time when SA is grappling with the three-headed monster of a weak currency, falling commodity prices and a contracting economy.

IOL

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