The new year comes with a hefty price tag at the pumps as petrol goes up yet again on Wednesday, January 4.
Petrol is set to increase by 48 to 50 cents a litre while diesel will go up as much as 39 cents a litre and illuminating paraffin by about 43 cents a litre according to the energy department. Commenting on an unaudited mid-month fuel price data released by the Central Energy Fund (CEF) in December, the Automobile Association (AA) predicted a petrol price surge. However the estimated 50 cent increase exceeds the AA’s December prediction of 27 cents.
The reason for the surge rests largely on a decrease in oil production. “Saudi Arabia has indicated that its crude oil production cuts may go beyond those proposed in November,” said the AA. This may decrease further if oil producers outside of the Organization of Petroleum Exporting Countries (OPEC) lower production. “There are also signals that non-OPEC members may voluntarily decrease production, which has the potential to further bolster international petroleum prices.”
Lowered fuel production combined with the fluctuating exchange rate set a high price as 2017 begins.