Motorists in South Africa are bracing themselves for a substantial increase in fuel prices this month, with record hikes expected to take effect from Wednesday, according to the Automobile Association (AA).
Based on unaudited data from the Central Energy Fund, the AA forecasts that petrol prices will surge by as much as R1.65 per litre for ULP95 and R1.59 per litre for ULP93. Diesel, on the other hand, is projected to experience a staggering increase of R2.85 per litre, while Illuminating paraffin could see a substantial rise of up to R2.80 per litre.
Layton Beard, the AA's spokesperson, notes that these petrol price hikes will be the most significant since July 2022. The primary drivers behind these expected increases are rising international oil prices, attributed to sluggish demand and reduced output. Saudi Arabia, the world's largest oil exporter, is expected to extend voluntary output cuts into October, further tightening oil supply and sustaining high prices.
According to the CEF's data, higher international oil prices are responsible for between 80% and 88% of the anticipated fuel price hikes, with the weaker Rand/US Dollar exchange rate accounting for the remainder.
While the Rand has shown some weakening against the US Dollar in August, it is not the primary contributor to the impending price hikes. The brunt of the responsibility falls on the surging international oil prices.
The AA warns that these fuel price increases are likely to have a cascading effect on the cost of goods and services across the board. To mitigate the impact of these hikes, the association offers some tips to motorists, including keeping vehicles in good mechanical condition, maintaining proper tire inflation, avoiding heavy traffic, refraining from overloading vehicles, and minimizing unnecessary travel.
