Image via Adobe Stock
Image via Adobe Stock
Motorists can expect hefty fuel price increases in early January amid rising global oil prices and despite a strengthening rand.
This is according to the Automobile Association (AA) which on Monday 4 January 2021 released anticipated fuel pricing, including paraffin, for the first month of the new year.
The AA, which described the increases as “significant”, made its assessments based on unaudited month-end fuel price data released by the Central Energy Fund.
“Fuel prices will rise significantly in January. 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,” said the AA.
“The outcome is steep increases across the board. Petrol is set to rise by up to 43 cents a litre, and diesel and illuminating paraffin by 55 cents,” said the Association.
According to the AA, coastal prices for unleaded 93 petrol on 4 November, 2020 was set at R13.88 per litre and at R13.75 per litre on 2 December of the same year.
According to the AA, which said the new fuel costs will come into effect on Wednesday 6 January 2021, motorists will pay R14.18 per litre at the pumps.
Inland, for the same two periods last year, motorists paid R14.39 and R14.26 per litre respectively. Motorists there will now pay R14.69 per litre.
Coastal prices for the same periods for unleaded 95 petrol was at R13.89 and R13.76 per litre respectively. Inland, prices for 4 November and 2 December 2 2020 were at the respective prices of R14.59 and R14.46 per litre.
The expected new pricing will now be R14.16 at the coast and R14.86 inland.
LRP petrol cost R13.88 and R13.75 per litre for the same two periods at the coast in 2020, while inland prices reflected costs of R14.39 and R14.26 per litre.
The new price of R14.18 (coast) and R14.69 per litre inland will also come into effect on Wednesday.
Diesel (500ppm) pricing at the coast for the same review periods in 2020 were at R11.65 and R11.85 per litre, but will increase to R12.40.
Inland, the price per litre under review was at R12.25 and R12.45. Motorists will this week see an increase to R13.00 per litre of 500ppm diesel.
Diesel (50ppm), which cost R11.69 and R11.89 at the coast during the last two months of 2020, will be increased to R12.43 per litre.
Inland, the same fuel, which was previously priced at R11.69 and R11.89 in December, will see an increase to R12.43 per litre.
The AA commented that the rand’s daily exchange rate had dipped to near R14.50 to the US dollar during December, with the average exchange rate hovering near R15.
The organisation noted however that it was concerned over the nearly 13% increase in international petroleum product prices over the same period.
While international oil prices have stabilised over the past few days, the AA said it was 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 AA noted.
“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,” concluded the Association.