JOHANNESBURG, Gauteng – Further fuel-rices are on the horizon according to Automobile Association mid-month fuel price data from the Central Energy Fund which suggests that unless things change by month-end ”South Africa’s fragile economy is set for a major hit”.
Petrol could rise by 80c/litre, the AA says, diesel 61c/litre, and illuminating paraffin 63c/litre, and adds: “The problem is international oil prices have been climbing daily. A general increase in positive sentiment as Covid-19 vaccines are rolled out has combined with upticks in global economic activity, pushing up demand for oil – and taking prices with it.”
NOT ALL THE RAND’S FAULT
The AA noted that the average exchange rate of the rand against the US dollar had not been a major contributor to the increases during the first two weeks of January 2021: “Despite some wild daily exchange-rate swings and the average rate creeping up from around R14.60 to just over R15.00, only four cents of the substantial predicted increases come from rand weakness.”
The AA added that the suggested increase could make life harder still for transport companies and the many people whose livelihoods have been crushed by the economic carnage of Covid.
“With the rand relatively strong by recent standards, the only hope for a reprieve relies on a pullback by oil. Unfortunately, the trend suggests that the situation could deteriorate further before month end.”