Stronger international oil prices and a weakening rand will combine to drive fuel prices higher in October, and more hikes are “almost inevitable” before the end of the year.
This is according to the Automobile Association (AA), which was commenting on unaudited month-end fuel price data released by the Central Energy Fund (CEF).
“The first half of September saw the rand appreciate against the US dollar, but this trend has been reversed since September 12, with the weaker currency eating into its earlier gains,” the AA said. “The current rand trend is strongly weaker, and we expect it to have an even bigger impact on fuel users in the medium term.”
Meanwhile, international fuel prices continued their run, having gradually climbed throughout September.
“As a result, petrol is set to rise by around 30 cents, diesel by 41 cents, and illuminating paraffin by 37 cents,” the Association commented.
“This month’s figures show just how vulnerable South African fuel users are to stronger fuel prices and rand depreciation,” the AA said.
“With the USA eyeing interest rate increases, and global oil markets remaining buoyant, our view is that further fuel price hikes are almost inevitable before year end,” it said.