Steep fuel price hike expected in January, AA warns

Fuel prices are expected to rise significantly in January, the Automobile Association (AA) warned on Wednesday.

It expected steep increases across the board, with petrol likely to rise by up to 43 cents a litre, and diesel and illuminating paraffin by 55 cents.

The AA made this prediction based on unaudited month-end fuel price data released by the Central Energy Fund.

"The rand has continued to advance against the US dollar, which is a pleasing outcome considering the severe beating the currency took earlier in the year. But even the currency's ongoing strength has not been enough to contain oil's march back towards its pre-Covid-19 price levels," the AA said in a statement.

International oil prices have stabilised over the past few days, but in the view of the the AA, it is too early to tell whether this is a new plateau or an expected pullback as trading activity declined over the Christmas weekend. 

 "The trend up to December 17 was quite markedly upward, and if that picks up more steam in the new year, it won't bode well for fuel prices in 2021," the association said.

"While South African fuel prices are well off their record highs, the country's economy is in a fragile state, and any shocks to international oil prices or the rand/US dollar exchange rate could hurt fuel users badly."

The current price of unleaded 93 petrol at the coast is R13.75 and R14.26 inland. The current price of unleaded 95 petrol is R13.76 at the coast and R14.46 inland.

The current price of 500 PPM diesel (coastal) is R11.85 and R12.45 inland. Diesel (50 PPM) is currently R11.89 at the coast and R12.40 inland.