Motorists advised to brace for more petrol pain

IN EVEN more bad news for consumers, the Automobile Association has warned motorists that further substantial fuel price hikes are lined up for the end of October.

The Automobile Association (AA) was commenting on unaudited mid-month fuel price data released by the Central Energy Fund.

“International oil prices remain stubbornly high and it is possible that current tensions involving Saudi Arabia, one of the world’s biggest oil producers, could place more pressure on fuel prices. More welcome news is that the rand is working in South Africa’s favour, and the recent firming of our currency against the US dollar has taken some of the bite out of oil’s rally,” the AA said in a statement yesterday.

However, the potential price hikes are still daunting, especially for diesel users. Petrol prices are currently set for a 40 cents-a-litre increase, while diesel and illuminating paraffin could spike by 70 cents and 65 cents respectively.

The AA says the predicted increase to the price of petrol must, for the moment, be seen against the backdrop of the Department of Energy’s (DoE) proposal to set a maximum price for the sale of 93 octane ULP and LRP fuels.

“Should this happen, it will allow fuel retailers to set their own prices below the maximum amount indicated by 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,” the AA stated.

However, the AA added that it welcomed government’s efforts on the issue of rising fuel prices, and that the Department of Energy had requested input from industry stakeholders.

It stated that the proposal looked to be consumer friendly, and that the detail would clarify how this would work once all the feedback was received.

“The country cannot continue to be hammered by large fuel price hikes without severe economic knock-on effects.

“The effect on bus and taxi operations could lead to fare hikes which exceed commuters’ ability to pay,” the AA noted.

“We again call on government to prioritise economic policies which inspire investor confidence. A stronger and more stable rand is the country’s only defence against the vagaries of the international oil price,” it concluded.