First fuel price hike in six months on the cards

THE Automobile Association and economists expect the petrol price to increase slightly for the first time in six months in November.

The predicted price hike is attributed to a weaker Rand and higher Brent crude oil prices due to the conflict in the Middle East.

Layton Beard, spokesperson for the Automobile Association, said that the five-month trend of fuel decreases was set to end in November according to unaudited mid-month data from the Central Energy Fund (CEF).

“According to the CEF’s figures, ULP95 is expected to be slightly higher by around 14 cents a litre, while ULP93 is set for an increase of around three cents/litre. Diesel is expected to increase by between 14 cents and 13 cents/litre while illuminating paraffin will increase by around seven cents a litre.”

Beard added that the increase is a result of higher international product prices and a steady softening of the Rand against the US Dollar.

“There has been a sharp rise in international product prices from the beginning of October due to the tensions which are ramping up in the Middle East.

“The local currency could be under significant pressure going into the last two weeks of October, and this could have a more significant impact on local fuel prices in November. At this stage, it is important to keep an eye on that indicator as we head into the new month.”

Beard said that lower stable fuel prices play a crucial role in the decrease of inflation and in lowering the prices of goods and services.

“It would greatly benefit our economy if the fuel price decrease trajectory continued for longer, but the expected increase, though marginal at this stage, comes at a time when most consumers and motorists are still struggling financially, and any increase now will add pressure on them.”