In a statement released by the AA, they confirmed that R20 per litre for fuel was “realistic” before the end of the year.
“The current picture is showing petrol up by 99 cents a litre, and diesel and illuminating paraffin higher by a whopping R1.42 a litre. This will push 95 ULP inland above R19/l (close to R19.30/l), and R17/l for diesel,” the AA said.
“Taking this potential increase into account, the price of a litre of fuel inland (95 ULP) will have increased from R14.86/l in January to R19.30/l in November – a 30% increase over 11 months.”
The AA added that, should predictions be true, the hikes in diesel and illuminating paraffin would be “the largest in SA history”. However, these predictions are still based on half a month’s data.
Predictions based on Brent Crude
“Brent Crude has broken through the 85 US dollars per barrel mark and the basket of oil prices used to calculate South Africa’s oil price are following Brent higher. We note the concern this is generating in the USA, where President Biden was reported to have called on the OPEC+ cartel to increase oil output to stabilise prices. This has not generated a response from OPEC+, and our view is that a response is not likely, since the current price pressures are beneficial to the cartel’s members,” the AA notes.
Furthermore, the AA noted the impact of the exchange rate and how the strength of the rand was a key factor in the fuel price.
Fuel prices are not decided by the AA
They further stated that the AA does not regulate or adjust fuel prices in South Africa, but it publishes two fuel price outlooks each month.
Fuel prices are officially calculated and adjusted on the first Wednesday of each month. These calculations and adjustments are made by the Department of Mineral Resources and Energy.