The Automobile Association (AA) warns that surging international petroleum prices are likely to hit South Africans hard at the pumps at the beginning of 2017.<\/p>\n
The AA was commenting on unaudited mid-month fuel price data released by the Central Energy Fund (CEF).<\/p>\n
“Saudi Arabia has indicated that its crude oil production cuts may go beyond those proposed in November,” the AA said. “There are also signals that non-OPEC members may voluntarily decrease production, which has the potential to further bolster international petroleum prices.”<\/p>\n
The first fortnight of December showed a strong appreciation in oil prices, while the rand remained volatile against the US dollar.<\/p>\n
Based on the current data, the indicative increase in fuel prices at the end of December will be around 27 cents a litre for petrol, 21 cents for diesel and 28 cents for illuminating paraffin.<\/p>\n
The AA further warned that the impact of production cuts was by no means factored into current oil prices.<\/p>\n
“If the oil-producing countries adhere to the proposed production cuts, oil prices are likely to strengthen until demand and production move back into equilibrium,” the association said.<\/p>\n
“Even a stronger rand could be overpowered by a sharp climb in the oil price, potentially meaning a succession of fuel price hikes which could impact the economy strongly over the next few months,” it said.<\/p>\n
This is how the price could reflect at the pumps (wholesale for Diesel):<\/p>\n
| Fuel<\/th>\n | December\u00a0official<\/th>\n | January expected<\/th>\n<\/tr>\n |
|---|---|---|
| 93 Petrol<\/td>\n | R12.59<\/td>\n | R12.86<\/td>\n<\/tr>\n |
| 0.05% Diesel (wholesale)<\/td>\n | R11.03<\/td>\n | R11.24<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n \n |