Weeks after fuel prices were hiked, the Automobile Association (AA) says that the pump price could rise by an estimated 16 cents in February.
The association makes this announcement on Tuesday saying the rise follows the country’s rand/dollar exchange rate which continues to take the shine off international oil price weakness.
The announcement by the Automobile Association seems to nullify predictions by the Energy Department that motorists could see a decrease in fuel prices by February if the rand continues to strengthen.
“We expect the rand to improve. If that happens it will help us to get lower prices in February” the department’s Robert Maake said after describing how the price of 93 octane will go up by 50 cents a litre, 95 octane goes up by 48 cents, while diesel will go up by 39 and 37 cents respectively.
Away from that, Nedbank chief Economist Dennis Dykes, on Tuesday, warns of a further hike in the price of petrol and diesel after the 48 cents per litre and there was a 37 cents per litre increase in the diesel price in January this year.
Dykes says one of the biggest factors for the increase stems from a deal made by oil producers to cut oil production, which caused upward pressure on the price.
“If things continue the way they are at the moment with the oil prices as well as the exchange rate, we’ll probably see another increase in February. The short-term outlook doesn’t look all that great.” he said.
Meanwhile, economist Mike Schussler has warned that further increase in fuel prices will have a damning effect on South Africans.
Schussler said when these prices go up it also impacts transport prices which on the other hand, will affect the cost of food products and many other things in the country.
“Very often transport costs mean other prices, such as food, go up as well. I think South Africans will be affected mainly by transport costs” he laments.