South Africa drivers should embrace for sharp increase in fuel prices

The Automobile Association says petrol prices are set for a significant spike in February.

The association says it expects petrol to rise by up to 82 cents a litre, diesel by 59 cents and illuminating paraffin by 60 cents. It cautions that South Africans are once again vulnerable to Rand weakness.

“Unfortunately our mid-month concerns over the advancing oil price have been borne out in practice”, the Association said in a statement.  “There has been a slow but steady rise in the price of oil which is likely to cause ongoing pain at the pumps.

The group says almost all the fuel price increases reflected by this month’s data are a result of stronger oil prices on international markets and a generally flat exchange rate between the Rand and the U.S. dollar.

The AA notes the Rand dropped to an all-time low of over R19 to the dollar last April and the currency has since appreciated to approximately its pre-Covid-19 level.

“The record low exchange rate fortunately went hand-in-hand with record low oil prices, so the impact went largely unnoticed as fuel prices plunged. However economic or policy shocks which weigh on the Rand are likely to have a more significant effect on the fuel price now that international oil prices have rebounded.”


Story compiled with assistance from wire reports