While we get ourselves prepared for the end of the year festivity, there are possibilities that a number of commodities will be hiked, one of such is the pump price.
Report from the Automobile Association (AA) has it that the coming month of November will experience further fuel price hikes following the fall back of the rand per dollar.
Wayne McCurrie, a financial analyst at Ashburton Investments blames the anticipated pump price hike on the fallout of the Gordhan saga which he said will lead to a significant rise in the price of petrol.
“There has been a definite appreciation in oil prices since OPEC resolved to cut oil production,
“The international price of petrol has climbed from 136 US cents per gallon to 148 cents since 27 September. Despite the rand’s gradual appreciation against the US dollar over the same period, there has been a substantial impact on what South Africans are likely to be paying at the pumps next month.” McCurrie said citing unaudited mid-month pump price data released by the Central Energy Fund (CEF).
Speaking further on this, McCurrie said global benchmark Brent crude price was trading at around $52.60 a barrel on Wednesday last week, while the rand was at R14.37 by 09h15, having weakened as much as 3.9% against the dollar on Tuesday.
The association said that the current data predict petrol to increase by around 48 cents per litre, diesel by 64 cents and illuminating paraffin by 57 cents.
The motoring body noted that the rand declined as a result of NPA’s latest fraud charges against the treasury head, Gordhan. The body said this would put further pressure on pump price before month end.
However, McCurrie warned that if Gordhan is forced out of office, South Africa would likely go into recession amid a collapse in the local currency, a rise in interest rates, and inflation.
“Our hope is that matter will be brought to a swift conclusion to reduce the tensions our markets are currently experiencing, and to bring more stability to our economic outlook,” the AA said.
“This is essential to minimize further weakening of the Rand / US dollar exchange rate, which directly affects the price South Africans pay for imported commodities such as fuel,” the Association concluded.
|Fuel||October (Inland)||Expected Price (November)|
|Diesel 0.05% (wholesale)||R10.72||R11.36|