Fuel price blues as oil, Rand bite

Sharp movements in international petroleum prices have combined with a weakening Rand to push fuel prices higher for December.

This is according to the Automobile Association (AA), commenting on unaudited month-end fuel price data released by the Central Energy Fund (CEF). Oil has continued the strong run we have seen throughout November and the trend remains upwards.

The Rand has followed a similar trend, weakening against the US dollar on average, although it has been surprisingly resilient in the days following South Africa’s recent credit ratings downgrade.

We expect illuminating paraffin to rise by around 76 cents a litre, diesel by 64 cents, and petrol by 72 cents.

South Africa’s economic situation remains weak, and our view is still that further fuel price hikes can be expected during the remainder of 2017 and into the first quarter of 2018.

There is always the temptation to spend more on non-essential items during the holiday period, but we advise motorists to be prudent and keep a cushion against higher motoring costs in the new year.