Petrol price up as Automobile Association warns of further fuel hikes
The Department of Energy announced on Monday that a litre of 95 octane petrol will cost R14.01 inland and R13.52 at the coast from Wednesday.
This is the first time since August 2014 that the inland price has breached R14.00/ litre.
The price of a litre of 93 octane petrol will be increasing by 25c, while a litre of 95 octane will go up by 29c.
A litre of diesel, meanwhile, will cost R12.12 inland and R11.74 at the coast.
The price of illuminating paraffin will rise by 39c/litre, meaning that a litre of paraffin will now cost R7.71 inland, and R7.13 at the coast.
The Central Energy Fund attributed the fuel price hikes to rising global prices for petrol and diesel.
This follows increases of 19c and 67c a litre for all grades of petrol in August and September respectively. In July motorists paid 69c less on a litre of petrol.
The Automobile Association (AA) predicted last week that fuel prices would go up, given stronger international oil prices and a weakening rand.
The rand was trading as high as R13.66/$ on Monday morning, while Brent crude traded at $51.45 a barrel.
“The first half of September saw the rand appreciate against the US dollar, but this trend has been reversed since September 12, with the weaker currency eating into its earlier gains,” the AA said in a statement.
“The current rand trend is strongly weaker, and we expect it to have an even bigger impact on fuel users in the medium term.”
The AA projected petrol to rise by about 30 c/l and diesel by 41 c/l, with illuminating paraffin up 37 c/l.
“With the USA eyeing interest rate increases, and global oil markets remaining buoyant, our view is that further fuel price hikes are almost inevitable before year end,” said the AA.
Dawie Maree, head of information and marketing at FNB Business Agriculture, shared similar views that another hike is possible before year-end. “The change of season in the northern hemisphere, normally resulting in higher demand, the volatility of the rand against major currencies, and the general investor confidence may see another increase before the year is out,” he said.
Maree projected that petrol and diesel prices would increase 40c/l.
The hike would negatively impact grain producers entering the new planting season, he said.
“Since fuel is a non-discretionary expense for the consumer, these types of movements is not good news for the man on the street,” he said. Fuel price increases would result in a secondary effect on inflation will be on inflation. This would impact food prices for consumers, he explained.
“However, the recent record harvest and decline in food inflation should serve as a buffer for possible interest rate increases,” he said. – News24