SA’s fuel price compares

Here’s how SA’s fuel price compares to the rest of the world. Picture: File.

Why the September fuel-price hike could be seriously harmful to SA

If the September fuel-price hike is as high as anticipated, it could push consumer inflation above the Reserve Bank’s upper limit.

SA’s fuel price compares

Here’s how SA’s fuel price compares to the rest of the world. Picture: File.

As we’ve already reported, the September fuel-price hike is anticipated to be BIG. If the latest forecast from the International Energy Agency is indeed correct, it will be “scaling record highs.” This is due to a reduction in output from oil-producing countries and global demand for oil reaching an all-time high.


September fuel-price hike
The anticipated petrol and diesel prices for September 2023 don’t look good. Image: Pixabay

Unfortunately, for South Africans, there is more at stake for the September fuel-price hike than how much more you’ll pay at the pumps. Economists believe the increase could push the country’s consumer inflation back above the upper limit of the target range set out by the South African Reserve Bank (SARB).

ALSO READ: City of Cape Town turns its zero-tolerance approach onto motorists

At the current predictions, an increase of R1.36 per litre is expected for 93 octane petrol and an increase of R1.39 per litre for 95 octane. While diesel motorists will be the hardest hit with a R2.60 per litre increase. Economists warn an increase of this magnitude – especially for diesel – could be devastating for consumer inflation and lead to another interest-rate hike before the end of the year.


September fuel-price hike
Image: SARB.

Fuel prices are the number one driver of consumer inflation in South Africa. Annual headline inflation in South Africa cooled to 5.4% in June – down from 6.3% in May. This kept within the SARB’s monetary policy target range of 3-6% for the first time since April 2022. Which allowed SARB to pause its benchmark lending rate after ten consecutive rises. A cycle that began in November 2021.

ALSO READ: New MEGA bridge in SA will be funded by Chinese money

The hope that the SARB hiking cycle ends – and may even reverse – all hinges on the September fuel-price hike. Unfortunately, the combination of a strong increase in the oil price, as well as the depreciation in the Rand could see prices increase even more before midnight Tuesday 5 September 2023.

Final price changes for both petrol and diesel will be confirmed in the weeks ahead.