Fuel prices are set for a significant spike when the price adjustment for February takes place next week, with petrol hit the hardest.
This is according to the Automobile Association (AA), which made the statement based the unaudited month-end fuel price data released by the Central Energy Fund.
The spike in prices comes after a slow and steady rise in the price of oil, and a relatively flat rand/US dollar exchange rate for the month.
The AA added that the rand dropped to an all-time low of over R19 to the dollar last April, and the currency has since appreciated to approximately its pre-COVID-19 level.
Expected increases for the different fuel types are outlined below:
- Petrol – 82 cents per litre increase
- Diesel – 59 cents per litre increase
- Illuminating Paraffin – 60 cents per litre increase
“The record low exchange rate fortunately went hand-in-hand with record low oil prices, so the impact went largely unnoticed as fuel prices plunged,” said the AA.
“But economic or policy shocks which weigh on the rand are likely to have a more significant effect on the fuel price now that international oil prices have rebounded.”