Price of fuel set to rocket in October, AA warns
South Africans should brace for more fuel price pain in October based on unaudited data from the Central Energy Fund (CEF), says the Automobile Association (AA).
The AA says the current data indicates an increase of about R1.20/litre for petrol and as much as R2/l in the wholesale price of diesel. Illuminating paraffin is also set for another increase with the data currently showing an under recovery of R1.84/l.
“Should these significant increases materialise, they will push fuel prices to levels last seen in July last year, stretching the personal finances of South Africans even further. Higher fuel prices will invariably lead to higher prices at the till, which will be a blow to many who are already experiencing financial distress,” said the AA.
According to the CEF’s data the main drivers behind the potential increases are higher international oil prices which have climbed substantially since August, mainly on the back of reduced output by major oil-producing nations.
The CEF’s data is showing that in the case of petrol, up to 80% of the increase can be attributed to higher oil prices while these prices are responsible for up to 86% of the expected climb to the price of diesel.
The weaker rand/US dollar exchange rate is contributing to the increases, but its impact, at the moment, is minimal compared to that of rising oil prices.
“The outlook is certainly bleak, though it has improved a little since the beginning of the month. With two more weeks before the official adjustment for October is made, South Africans will be hoping the downward trajectory continues. Though increases are now a certainty for October, the question will be by how much fuel prices will ultimately rise,” the AA said.
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