Cape Town - With a rising oil price and weakening rand South African motorists and the road transport industry must steel themselves for a sharp hike in the fuel price next month.
This will follow close on the heels of Wednesday’s hikes of 26c/litre for petrol and 30c/litre for diesel.
Over the past week the rand weakened from R7 to R7.24/dollar and the price of Brent crude rose to $102/barrel. At one point on Thursday the rand dipped to R7.27/dollar.
Even after the latest price adjustment took effect on Wednesday, on the day there was still an underrecovery of 26c/litre for petrol and 46c/litre for diesel, according to information from the department of energy.
The average underrecovery between Friday January 28 and Wednesday was 40c/litre for petrol en 60c/litre for diesel. This meant motorists were paying 40c/litre too little for imported fuel.
Econometrix economist Tony Twine said that if the rand/dollar exchange rate and international fuel prices remained constant until February 24, the March petrol price could be bumped up another30c/litre, and diesel 50c/litre.
Together with the annual increase in the fuel tax and the Road Accident Fund levy – which normally takes effect in April – and what Finance Minister Pravin Gordhan
announces in his budget speech on February 23, the April price of petrol in South Africa could reach R9.50/litre and diesel R9/litre, Twine has estimated.
He said that for much of January oil prices were at $98 a barrel because of the cold winter in Europe and north-east America, as well as the Australian floods which ruled coal out as an alternative energy source for many importing countries.
With last week’s announcement by the United Arab Emirates that, as a member of the Organisation of Petroleum Exporting Countries, it would increase its oil production, the oil price dropped to $94 a barrel overnight.
But then last Friday the Egyptian unrest broke out and at the beginning of the week oil prices had returned to $98/barrel, Twine explained.
For business news in Afrikaans, go to www.sake24.com