Mid-month unaudited data from the Central Energy Fund (CEF) is predicting the biggest fuel price hike in South Africa’s history by some margin. This is according to the Automobile Association (AA) which has monitored the fuel price data from 1 September to date.
“A spike in international oil prices and a huge swing in the Rand/US dollar exchange rate have combined to predict a knockout blow at the pumps at the end of September,” the AA says.
“Based on the current data, petrol users will be paying R1.12 more per litre, with illuminating paraffin costing R1.17 more,” the Association warned.
But it is diesel users who will be hit hardest, with a possible price hike of R1.38 per litre, pushing diesel to within a whisker of R16 per litre.
To put this in perspective, should this increase materialise, it will push the price of 93 unleaded octane fuel inland close to R17 a litre, off a January price of R14.20 – a total increase of around 20 percent, year-to-date.
The Association also points out that a massive hike in the diesel price will be especially catastrophic for the agricultural sector which is already reeling from the prolonged drought. It says that extreme fuel price hikes could push marginal businesses, including farms, to financial breaking point, and have a massive negative impact of consumer pricing.
“While we earnestly hope the picture improves before month end, we once again call on the government to urgently address the policy and structural issues which have put fuel users in the front line of the Rand’s weakness,” the AA concludes.