Expect further petrol price hikes in 2018

Sharp movements in international petroleum prices have combined with a weakening rand to push fuel prices higher for December, the Automobile Association (AA) said on Tuesday.

Commenting on unaudited month-end fuel price data released by the Central Energy Fund (CEF), the AA said that oil has continued the strong run seen throughout November, while the trend remains upwards.

“The rand has followed a similar trend, weakening against the US dollar on average, although it has been surprisingly resilient in the days following South Africa’s recent credit ratings downgrade,” the association said.

It said that it expects illuminating paraffin to rise by around 76 cents a litre, diesel by 64 cents, and petrol by 72 cents.

“South Africa’s economic situation remains weak, and our view is still that further fuel price hikes can be expected during the remainder of 2017 and into the first quarter of 2018,” the AA said.

Analysts HAVE pointed to continued volatility in local trading, following the decisions of rating agencies S&P and Moody’s late last week, and ahead of the ANC elective conference in December.

Bianca Botes, corporate treasury management at Peregrine Treasury Solutions said that all eyes will remain on the local political landscape to determine whether or not Moody’s will downgrade South Africa, with volatility and downward pressure on the rand to be expected.

This comes after S&P downgraded South Africa on Friday evening, while Moody’s placed South Africa under downgrade review and indicating that the December conference will set the tone for their decision.

“There is always the temptation to spend more on non-essential items during the holiday period, but we advise motorists to be prudent and keep a cushion against higher motoring costs in the new year,” the AA concluded.

The final fuel price changes are expected to be announced by the energy minister by the end of the week.

Fuel November official December expected
93 Petrol R13.78 R14.50
95 Petrol R14.05  R14.77
0.05% Diesel (wholesale) R12.36  R13.00

 


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Expect further petrol price hikes in 2018