• South African fuel prices are set for another increase in March 2021.
• The price of petrol could increase by as much as 56c/litre.
• The international oil price is affecting local prices negatively.
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Bullish international oil prices are setting the stage for yet another hefty hike in fuel prices. According to the Automobile Association (AA), this is commenting on unaudited mid-month fuel price data released by the Central Energy Fund. The Association says that the current picture shows month-end increases of up to 56 cents a litre for petrol, 47c for diesel, and 41c for illuminating paraffin.
The AA says: "Oil prices advanced at a leisurely pace during January, but the increase has quickened since then. International product prices shot up by around 8% in the first two weeks of February." The Association notes that on the plus side, the Rand/US dollar exchange rate has worked in South Africa's favour, with the Rand strengthening around 8c against the US dollar in February. However, this has been far from enough to offset the oil price."
The AA concludes: "If oil continues on this trajectory, South Africa's fuel prices might edge back into record territory in the medium term. Fuel users also remain vulnerable to economic shocks which might weaken the Rand."