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The five-month trend of fuel decreases is set to end in November according to the Automobile Association (AA). Commenting on unaudited data from the Central Energy Fund (CEF), the AA says it expects the first fuel price increase since May in November as a result of higher international product prices and a steady softening of the Rand against the US Dollar.

 

According to the CEF’s figures, ULP95 is expected to be slightly higher by around 14 cents a litre, while ULP93 is set for an increase of around three cents/l. Diesel is expected to increase by between 14 cents and 13 cents/l while illuminating paraffin will increase by around seven cents a litre.

 

“Lower stable fuel prices play a crucial role in the decrease of inflation, and in lowering of the prices of goods and services. It would greatly benefit our economy if the fuel price decrease trajectory continued for longer but the expectant increase, though marginal at this stage, comes at a time when most consumers and motorists are still struggling financially and any increase now will add pressure on them,” notes the AA.

 

The AA says the CEF data is indicating that the expectant increases in this cycle are a result of a sharp rise in international product prices from the beginning of October, and the steady weakening of the Rand against the US/Dollar – both key metrics in determining local fuel pricing.

 

“Due to the tensions which are ramping up in the Middle East, the local currency could be under significant pressure going into the last two weeks of October and this could have a more significant impact on local fuel prices in November. At this stage it is important to keep an eye on that indicator as we head into the new month,” says the AA.

 

Officially adjusted fuel prices come into effect on Wednesday, 6 November. The official announcement of the November fuel price adjustment by the Department of Mineral Resources and Energy (DMRE) is expected by Monday 4 November at the latest. The AA also notes that given this is a mid-month review of the CEF data, pricing is likely to change before then, but that it expects fuel to be more expensive in November than it is currently.

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