‘Massive’ fuel-price hike on the horizon for South Africa, warns AA…
The Automobile Association has warned South African motorists to brace for a “sharp rise” in fuel prices at the start of February 2021.
Commenting on unaudited mid-month fuel price data released by the Central Energy Fund, the AA said the country was facing heavy fuel-price hikes “unless the picture drastically improves by month-end”.
At this mid-month point, petrol is set for a whopping increase of 80 cents a litre, diesel is flagged for an increase of around 61 cents a litre, and illuminating paraffin for an increase of 63 cents, the AA said.
“The problem is international oil prices, which have been consistently climbing with each passing day,” the AA explained.
“A general increase in positive sentiment as COVID-19 vaccines are rolled out has combined with upticks in global economic activity, pushing up demand for oil – and taking prices with it.”
The AA noted the average exchange rate of the rand against the US dollar had not, however, been a “major contributor” to the increases throughout the first two weeks of January.
“Despite some wild swings in the daily exchange rate, and the average rate creeping up from around R14,60 to just over R15,00, only four cents of the substantial predicted increases come from rand weakness.”
The Association said an increase of this magnitude “would make life harder still for transport companies and the many people whose livelihoods have been crushed by the economic carnage of COVID-19”.
“With the rand relatively strong by recent standards, the only hope for a reprieve relies on a pullback by oil. Unfortunately, the trend lines suggest that the situation may deteriorate further before month end,” the AA concluded.
Credit – Carmag.co.za