With a fluctuating exchange rate, the petrol price hike this Wednesday, February 1 could be the start of a long haul.
A litre of Petrol is expected to cost around 30 cents more, while the diesel price is likely to increase by 22 cents, and illuminating paraffin by 16 cents and the Automobile Association (AA) warned motorists not to rely on a softer fuel price position in the medium term. “International oil prices have been on an upward trend since the start of December 2016,” said the AA which was commenting on unaudited month-end fuel price data released by the Central Energy Fund (CEF).
It’s all up to the Rand strength and with a kinder exchange rate in late-January, the petrol price might not go up too much this week. “International oil prices remain near their recent highs, but the Rand has strengthened around ten cents against the US dollar since January 15,” the AA said.
Uncertainty looms as the oil price equilibrium remains unsteady with the OPEC production cuts to filter into the global economy making the Rand vulnerable to political and economic shocks. “We advise motorists to create as much space as they can in their household budgets to accommodate possible future fuel price hikes,” the Association concluded.