The petrol price is set to increase by 44 and 43 cents, respectively, per litre this Wednesday (5 October).
The Department of Energy announced the price hike on Friday. They commented that current economic factors, that influenced the fuel price in September, resulted in an increase in the average international product prices
for petrol, diesel and illuminating paraffin.
Increase in Petrol Prices, October 2016
Performance of the Rand, September 2016
On average, the rand appreciated against the dollar during
September but still remained above the average of August.
The average rand/dollar exchange rate for September was R14.0057 compared to R13.8016 during August. This resulted in an increase in the contribution to basic fuels such as petrol, diesel and illuminating paraffin by 7.89c/l, 7.48c/l and 7.50c/l.
AA Predicted Petrol Hike
Last Thursday, the Automobile Association (AA) said it expected the price of petrol to increase by between 43c and 45c a litre, diesel by 23c and illuminating paraffin by 22c. They went on to say that the bulk of the fuel price increase is as a result of the stronger international petroleum.
"Only around eight cents of this month's increase will come from rand weakness. It is oil strength which has been the major contributor," the AA said.
Neil Roets, CEO of Debt Rescue expects further increases in the fuel price towards the end of the year.
“The ongoing political bickering within the ANC and an extremely sluggish economy is likely to impact on the rand and it looks as if the price of crude oil may also be on the rise,” said Roets.
Expected Rise Of Food Prices
Roets added that one of the major effects consumers will see from the fuel price hike is the effect on the economy and the continued food price increase as suppliers’ transportation costs rise.
“The real elephant in the room is the expected downgrade by ratings agencies later this year,” he said.
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