Skip to main content

Big fuel price increases expected in October

| Economic factors

Fuel prices are expected to rise further in October, primarily due to the sharp rise in crude oil price, warns independent economist Fanie Brink.

Citing information published by the department of energy on Tuesday, Brink said that the price of gasoline 93 (ULP & LRP) in Gauteng could rise by 26.3 cents per liter on Wednesday, 4 October.

The price of diesel is also expected to rise by 37.8 cents per liter.

Brink said that this rise directly correlates with the average daily Brent crude oil price, which increased from $52.34 to $59.22 a barrel over the past month – the highest level since June 2015.

International factors

While South Africa’s weak rand plays a part, Brink said that the increase was primarily supported by Turkey and its threat to cut the crude oil being transported by a pipeline from Iraq to the outside world.

Hurricane Harvey also caused the USA to close almost 25% of its refining capacity, while the rough sea caused by Hurricane Maria had also delayed the transport of crude oil along the North Atlantic coast.

“The higher crude oil price has resulted in sharp increases in the average international prices of petroleum products, which could cause possible increases of 33.2 cents per liter in the gasoline price and 44.8 cents per liter in the diesel price,” said Brink.

“The daily average R/$ exchange rate strengthened R/$12.75 during the first week of September and subsequently weakened again to R/$13.28, but it is expected that the price of gasoline will decrease by 6.9 cents per liter and the diesel price by 7 cents per liter.”

Pin It

Related Articles

South Africans are resilient people who are always ready to seek solutions for problems, even if the trials they face are caused by events that are beyond their control. An empowering example of this approach to life is the use of grocery stokvels...
In response to rising food costs, The SPAR Group offers practical tips for beating food inflation through savvy shopping and creative cooking.
By: Myles Illidge – MyBroadband South Africa’s Road Accident Fund (RAF) tax and General Fuel Levy (GFL) add between R272 and R483 to the price of a tank of fuel, depending on the size of your car’s tank.
By: Shaun Jacobs – Daily Investor Major changes are coming to VAT in South Africa, with the government looking to expand the range of food items exempt from the tax. 
By: Hanno Labuschagne - MyBroadband An anticipated strengthening of the rand and slipping global oil prices could result in lower petrol prices at the pumps next month.