Expect to pay a lot more for petrol next week

The latest data from the Department of Energy suggests that motorists can expect a sharp increase in fuel prices in May.

Economist, Fanie Brink, said that motorists can expected price of gasoline 93 (ULP & LRP) in Gauteng to increase by 45.4 cents per litre on Wednesday, 3 May 2017, while the price of diesel with a 0,005% sulphur content is expected to rise by 32.6 cents per litre.

The main reasons for these expected price increases can mainly be attributed to the weakening in the average R/$ exchange rate over the period from 31 March to 24 April 2017, Brink said.

Although the daily exchange rate has appreciated to around R/$13 since mid-April, the average exchange rate over the same period has only strengthened to R/$13.53.

“It is therefore still much weaker than the average R/$12.90 exchange rate on which the price changes for April were calculated,” he said.

International oil prices have retreated in virtual lockstep with a strengthening rand, complicating attempts to forecast a month-end fuel price, the Automobile Association (AA) said.

“After a sharp rise from the end of March, international petroleum prices have given up almost all their gains in the past two weeks. Over the same period, the rand has unexpectedly firmed to near its pre-cabinet reshuffle levels,” the AA said.

“We anticipated oil would be volatile in 2017, but we believe the rand’s strength flatters to deceive. The effects of various factors over longer timescales are what will ultimately determine the level of the rand and, by implication, what motorists will pay for fuel in the coming months,” the association said.

The final price changes are expected to be announced by the minister of Energy on Friday, 28 April 2017.

This is what you can expect to pay