Fuel hike big­gest in SA’s his­tory

The Witness - - YOUR MONEY -

MID-MONTH data from the Cen­tral En­ergy Fund (CEF) pre­dicts the big­gest fuel price hike in South Africa’s his­tory — R1,12 more for a litre of petrol.

This is ac­cord­ing to the Au­to­mo­bile As­so­ci­a­tion (AA), which said yes­ter­day that a spike in global oil prices and a “huge swing in the rand/ U.S. dol­lar ex­change rate” have com­bined to pre­dict a knock­out blow at the pumps at the end of Septem­ber.

“Based on cur­rent data, petrol users will be pay­ing R1,12 more per litre, with il­lu­mi­nat­ing paraf­fin cost­ing R1,17 more,” the AA warned.

Diesel users will be hit hard­est, with a pos­si­ble price hike of R1,38 per litre.

Should this in­crease ma­te­ri­alise, it will push the price of 93 un­leaded oc­tane fuel in­land close to R17 a litre, off a Jan­uary price of R14,20 — a to­tal in­crease of around 20%.

The AA said a mas­sive hike in the diesel price will be es­pe­cially cat­a­strophic for the agri­cul­tural sec­tor, much of which is still reel­ing from drought.

“Ex­treme fuel price hikes could push mar­ginal busi­nesses, in­clud­ing farms, to fi­nan­cial break­ing point, and have a mas­sive neg­a­tive im­pact of con­sumer pric­ing,” the AA said.

Econ­o­mist Dawie Roodt said the fuel price in­crease will stress out highly in­debted con­sumers and add to the al­ready neg­a­tive eco­nomic sen­ti­ment. “It could even be the last nail in the cof­fin when the rat­ings agen­cies an­nounce their lat­est rat­ings for South Africa’s sov­er­eign debt,” he said.

“Ex­treme fuel price hikes could push mar­ginal busi­nesses, in­clud­ing farms, to fi­nan­cial break­ing point.”

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