Fuel prices in South Africa are set to increase significantly, driven by a weak rand and elevated global oil prices.
Motorists in South Africa are preparing for another significant rise in fuel prices. Data from the Central Energy Fund (CEF) reveals a substantial increase in both petrol and diesel costs. According to month-end data, petrol prices are projected to climb by as much as 90 cents per litre, while diesel could see an increase exceeding R1 per litre.
Despite a slight recovery in the rand and a dip in global oil prices, these factors have proved insufficient to counteract the upward trend in fuel costs that has characterized the beginning of the year.The projected price hikes follow an initial 19-cent increase in January. Economists warn that this latest surge could exacerbate existing inflationary pressures, which have already been on the rise. The latest Producer Price Index (PPI) indicates inflationary trends, while consumer prices also experienced a slight uptick to 3.0% in December. Analysts predict further increases in the first quarter of the year.A key driver behind the rising fuel costs is the weakness of the rand. The exchange rate has been fluctuating around R18.50 to R19.00 against the US dollar, compared to R17.40 in late December. This depreciation has contributed 37 to 41 cents per litre to the under-recovery. The rand's struggles are partly attributed to global market uncertainties, particularly surrounding US political developments and the unpredictable nature of President Donald Trump's policies. Furthermore, while oil prices have eased somewhat from their January peaks, they remain higher than in December. Oil is currently trading around $76 per barrel, down from over $85 earlier in the month, adding 46 to 67 cents per litre to the under-recovery. The Department of Petroleum and Mineral Resources is anticipated to confirm the official price changes in the coming days. The new fuel prices are scheduled to take effect on Wednesday, 5 February.
FUEL PRICES SOUTH AFRICA RAND INFLATION OIL PRICES
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