Poison at the pump: motorists will be bitten where it hurts
The Times Editorial: There is only one snake with a footprint. The line at the pump when the fuel price goes up has a carbon footprint.
You are likely to see motorists snaking around the corner on the first Tuesday of next month as they fill up before petrol and diesel again hit record highs.
It's not certain that the fuel price will go up next month but it is highly likely.
Halfway through a month is a pretty good time to make a prediction.
The Central Energy Fund publishes a daily update on its average over- or under-recovery on petrol and diesel. Whatever that number is at the end of the month, it is very close to the decrease (in case of an over-recovery) or increase (in case of an under-recovery).
Looking at the latest update, motorists can expect to pay R12.34 a litre for petrol from the first Wednesday of October.
Two things determine the price: the rand/dollar exchange rate and the price of oil. Both have been doing what South African motorists don't want.
The rand has depreciated against the dollar, making it more expensive to import fuel. On top of that, the oil price has spiked in recent weeks.
And it might get worse, because the rand seems vulnerable to further falls as loud protests in the mining sector and the Marikana situation spook investors. When foreigners sell JSE-listed shares, the rand slides.
And they will sell. Even if calm returns, the latest data show that this country has a gaping current account deficit, another red flag for investors.
The oil price looks like something dreamt up by the Montgolfier brothers. It keeps rising as the air in the Middle East gets hotter. And the atmosphere looks unlikely to cool down soon.
So, South Africa's fuel price record could be broken the very next month.
The snake will bite. And the only anti-venom could be to buy shares in a South African company that produces fuel.