Fuel hike biggest in SA’s history
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.”