Cape Town – South Africans are bracing for another round of fuel price hikes in October, according to preliminary data from the Central Energy Fund (CEF), as reported by the Automobile Association (AA).
The current unaudited data suggests that petrol prices may surge by approximately R1.20 per litre, while the wholesale price of diesel could see an increase of up to R2 per litre.
Additionally, illuminating paraffin is expected to face a price hike, with data indicating an under recovery of R1.84 per litre.
The AA has raised concerns about the potential impact of these significant increases on the already strained personal finances of South Africans.
Rising fuel prices are likely to ripple through the economy, leading to higher prices at the checkout counter.
This will pose a substantial challenge for individuals already grappling with financial distress.
“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, and which will be a blow to many who are already experiencing financial distress,” the AA said.
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The primary driver behind these potential price hikes, as per CEF’s data, is the surge in international oil prices.
Since August, oil prices have experienced substantial increases, largely due to reduced production by major oil-producing nations.
According to CEF’s findings, as much as 80% of the expected petrol price increase can be attributed to higher global oil prices, while these prices are responsible for up to 86% of the projected diesel price hike.
Although the weaker Rand/US Dollar exchange rate is playing a role in the increases, its impact currently pales in comparison to the influence of rising oil prices.
While the outlook remains bleak, there has been a slight improvement since the beginning of the month. With two more weeks to go before the official fuel price adjustment for October, South Africans are hoping for a continued downward trend.
“The outlook is certainly bleak, although 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. Although increases are now a certainty for October, the question will be by how much fuel prices will ultimately rise,” said the AA.
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Compiled by Betha Madhomu
