The Automobile Association of South Africa (AA) has predicted that the biggest fuel price hike in South Africa’s history is looming for October 2018 according to unaudited data from the Central Energy Fund (CEF).
Rising fuel prices remain a major cause of concern for many South African motorists and consumers who have endured countless increases that continue to squeeze household budgets.
Now, a major increase, potentially the biggest in South Africa’s history, could materialise in October 2018. The AA said that, “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.”
As a result, motorists are facing the possibility of paying R1.12 per litre more for petrol while diesel users will be hardest hit with a potential increase of R1.38 per litre. The cost of illuminating paraffin could rise by R1.17 per litre.
If this materialises, 93 unleaded petrol will cost close to R17 per litre inland, representing a 20% year-to-date increase from the R14.20 price in January 2018.
The agricultural sector, which is already under stress from the prolonged drought, will be severely affected by the rising cost of diesel. The AA warns that extreme price hikes such as this will place marginal businesses (including farms) under considerable pressure and will ultimately have a negative impact on consumer pricing.
Furthermore, the AA has called for the government to urgently address policy and structural issues which place fuel users in the front line of the Rand’s weakness.