AA predicts end to cycle of fuel price decrease in November

Fuel Prices Set to Increase in November

Motorists in Johannesburg will soon face higher fuel prices as the five-month downward trend comes to an end. The Automobile Association (AA) has issued a warning that fuel prices are expected to rise next month.

Since June, fuel prices have been on a decline due to a drop in global oil prices, resulting in a significant over-recovery in local fuel costs. However, according to the AA and unaudited data from the Central Energy Fund (CEF), the first fuel price hike since May is anticipated in November.

The AA attributes this impending increase to elevated international product prices and a gradual weakening of the Rand against the US dollar. Specifically, ULP95 is projected to rise by approximately 14 cents per litre, while ULP93 is set to increase by around 3 cents per litre. Diesel prices are expected to go up by 13 to 14 cents per litre, and illuminating paraffin will see an increase of about seven cents per litre.

Stable or decreasing fuel prices play a critical role in curbing inflation and reducing the costs of goods and services. The AA emphasizes that a prolonged decrease in fuel prices would greatly benefit the economy. However, consumers and motorists may face financial strain with the imminent price hike.

The rise in international product prices since the beginning of October, coupled with the Rand’s decline against the US dollar, are the primary factors influencing local fuel pricing. The AA cautions that escalating tensions in the Middle East may further weaken the local currency, potentially leading to a more substantial impact on fuel prices in November.

Official adjustments to fuel prices are scheduled to take effect on Wednesday, November 6. The Department of Mineral Resources and Energy is expected to announce the November fuel price adjustment by Monday, November 4, at the latest. Given the mid-month review of CEF data, pricing may fluctuate, but an overall increase in fuel costs is anticipated for November.

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Source: The Citizen