Petrol price rises amid weaker rand | Fin24
 
Loading...

Petrol price rises amid weaker rand

Oct 29 2017 10:30

Cape Town – The price of all grades of petrol will increase by 4c a litre from Wednesday, the Department of Energy announced on Sunday.

Diesel consumers will however suffer a steeper hike, with the price of diesel 0.05% sulphur and diesel 0.005% sulphur increasing by 23c and 27c per litre respectively.

The price of illuminating paraffin (wholesale) will increase by 21c and illuminating paraffin (SMNRP) by 28c a litre, the DoE said in a statement.

LPGAS will be 17c more expensive per kilogram when the new monthly maximum retail price kicks in on Wednesday.

The DoE attributed the fuel price hikes to increased international prices and the weakening of the rand against the US dollar in the period under review.

According to the DoE the rand depreciated from R13.1317 in the previous review period to R13.6210 in current period from 29 September to 26 October.

“This led to a higher contribution to the Basic Fuels Price on petrol, diesel and illuminating paraffin by 22.12c/l, 22.19c/l and  22.07c/l respectively.”   

The Automobile Association cautioned on Friday that motorists should brace for further petrol price pain next month as the latest price determination did not take into account the considerable drop in the rand following Finance Minister Malusi Gigaba's mini budget address.

"We expect that impact to immediately start feeding into the next month's fuel price calculations, meaning South Africans should prepare for further fuel price hikes before Christmas," said the AA.

The rand hit an 11-month low following Gigaba’s maiden budget speech to trade at R14.10 to the US dollar on Wednesday. Shortly before Gigaba began his address, it was trading at R13.74 to the dollar

On Thursday it traded as low as R14.26/$, and opened at R14.24/$ on Friday.

The local unit closed at R14.10 to the greenback in New York on Friday.

In a report on the rand issued on Thursday by Investec, Chief Economist Annabel Bishop said that further rand weakness was expected for the quarter, with the rand possibly falling to R14.40/$.

For the first quarter of 2018, the rand could move to R15.06/$ if a “compromised candidate” emerges as a leader of the ANC following the elective conference in December.

But in the absence of further credit rating downgrades, and in a strong global growth environment, the rand could move back to R14.10/$, said Bishop.

But the build up of government debt does not make this a certainty, she said.

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter:

department of energy  |  rand  |  petrol  |  fuel prices  |  sa economy
NEXT ON FIN24X

 
 
 
 

Company Snapshot

#MINIBUDGET2019

Struggling power utility Eskom will take centre stage at this year's mini budget
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What do you think about private healthcare in SA?

Previous results · Suggest a vote

Loading...