Another fuel hike expected at the end of October

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Motorists should brace themselves for yet another fuel price hike at the end of October for November, according to the current data prediction.

This is according to the Automobile Association (AA) which was commenting on recent exchange rate and commodities data.

According to the AA, the current picture shows petrol up by 99 cents a litre, and diesel and illuminating paraffin higher by a whopping R1.42 a litre.

The association said this will push 95 ULP inland above up to R19.31 p/l and R17 p/l for diesel.

AA spokesperson Layton Beard said taking this potential increase into account, the price of a litre of fuel has increased by 30% over 11 months -from R14.86 in January to R19.30 in November.

Beard said the hikes in diesel and illuminating paraffin would be the largest in South African history, bearing in mind that this is only based on half a month’s data.

“R20 a litre for petrol is now a realistic scenario before the end of 2021,” said Beard, adding that it sees little hope of improvement before the end of October.

“Brent Crude has broken through the 85 US dollars per barrel mark and the basket of oil prices used to calculate South Africa’s oil price are following Brent higher.”

Beard said the association does not expect the oil price squeeze to ease in the short term, especially as the demand for oil will increase as the north enters its winter season.

The AA also noted that over the first half of October, the average rand / US dollar exchange rate jumped from around R14.55 to the dollar to R14.90.

It said the rand is still far above its June level of below R13.50 to the dollar but that the strengthening trend lasting nearly 15 months was abruptly reversed in June.

“South Africans are paying at the pumps for weak governance, as one of the key indicators of the price of fuel depends on the exchange rate,” added Beard.

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