The fuel price crisis is deepening as yet another fuel price increase is looming for November 2018 according to unaudited mid-month fuel price data released by the Central Energy Fund.
Crippling fuel price increases over the past few months is putting consumers and the economy under considerable pressure and further increases are likely to materialise in November 2018. Last month saw a massive petrol price increase of 99 c/l while the price of diesel increased by R1.24 p/l.
The Automobile Association of South Africa (AA) has warned that while international oil prices remain high, current tension involving Saudi Arabia (one of the world’s largest oil producers) could have a negative impact on fuel prices. The Rand, however, has marginally strengthened against the US Dollar, which has helped to dilute the sting of rising oil prices.
As it stands, the petrol price could see an increase of 40 c/l come November 2018 while the price of diesel could increase by as much as 70 c/l.
Some relief, however, could be in sight if the Department of Energy’s proposal to set a maximum price for the sale of 93 octane ULP and LRP fuel materialises. “Should this happen, it will allow fuel retailers to set their own prices below the maximum amount indicated by the government, and may, depending on the margins, ease the burden on users of the two identified fuels. It must be stressed, however, that we did not participate in the drafting of the proposal, so details on its possible implementation remain unclear to us” says the AA.
Fuel price increases will have a far-reaching impact on consumers and the economy. The AA has called on the government to prioritise economic policies which inspire investor confidence and highlighted the fact that a stronger and more stable Rand is the country's only defence against the vagaries of the international oil price.