Hefty rise in fuel prices expected next month

Petrol attendant Gift Motau at an Engen garage. Motorists should brace themselves for yet another fuel hike as AA predicts a sharp rise next month. Picture: Jacques Naude/African News Agency /ANA.

Petrol attendant Gift Motau at an Engen garage. Motorists should brace themselves for yet another fuel hike as AA predicts a sharp rise next month. Picture: Jacques Naude/African News Agency /ANA.

Published Jan 19, 2021

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Durban - MOTORISTS should brace themselves for yet another fuel hike as AA predicts a sharp rise next month.

Commenting on unaudited mid-month fuel price data released by the Central Energy Fund, AA warned that unless the picture drastically improves by the end of the month, the country’s fragile economy was in for a rough ride.

At the start of this month, motorists were dealt a heavy blow when petrol increased by between 40 cents and 43 cents a litre, and diesel hiked by 54 and 55 cents.

The AA said that mid-month predictions suggested that petrol was set for another whopping increase of 80 cents a litre. Diesel was flagged for an increase of 61 cents a litre, and illuminating paraffin was expected to go up by 63 cents.

The previous hike was reportedly due to international petroleum costs and the movement in the rand versus dollar exchange rate.

"The problem is international oil prices, which have been consistently climbing with each passing day," the AA said.

"A general increase in positive sentiments as COVID-19 vaccines are rolled out has combined with up ticks in global economic activity, pushing up demand for oil -and taking prices with it."

The AA further said the average exchange rate of the rand against the US dollar had not, however, been a major contributor to the increases throughout the first two weeks of this month.

"Despite some wild swings in the daily exchange rate, and the average rate creeping up from around R14.60 to just over R15, only four cents of the substantial predicted increases come from rand weakness,” said the AA.

The AA said the expected increases would make life harder for transport companies, and many people whose livelihoods had been affected by the economic carnage of Covid-19.

"With the rand relatively strong by recent standards, the only hope for a reprieve relies on a pull-back by oil. Unfortunately, the trend lines suggest that the situation may deteriorate further before month end,” said the AA.

The Mercury

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