The Automobile Association (AA) indicated that current data is predicting fuel price hikes of catastrophic proportions at the end of October for November. According to a statement released by the AA on Monday, October 18, the current picture is showing that petrol is up by 99 cents a litre, and diesel and illuminating paraffin are higher by a whopping R1.42 a litre.
However, this will push 95 ULP inland above R19/l, and R17/l for diesel, 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 hikes in diesel and illuminating paraffin would be the largest in South African history, bearing in mind that this is only based on half a month’s data. R20 a litre for petrol is now a realistic scenario before the end of 2021,” says the AA, adding that it sees little hope of improvement before the end of October,” the statement said
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The Association says it does not expect the oil price squeeze to ease in the short term, especially as the demand for oil will increase as the north enters its winter season.
” Brent Crude has also 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 indicated.
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