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Get ready for a steep fuel price hike in December

| Economic factors

There will be less holiday cheer for South African motorists this year, with a steep fuel price increase predicted for December.

According to the Automobile Association, unaudited mid-month fuel price data from the Central Energy Fund points towards an increase in the region of 74 cents a litre for petrol, 63 cents a litre for diesel and around 75c/l in the case of illuminating paraffin.

The AA puts this down to a significantly weaker rand, which is testing one-year lows against the US dollar, while international oil prices have also seen substantial increases this month. 

At the time of writing the rand was trading at R14.33 to the dollar, versus R14.12 at the beginning of the month, although the local currency has improved from lows of around R14.50 earlier in the month.

Concerns surrounding the government’s fiscal discipline, and the possibility of further credit downgrades by ratings agencies, are likely to continue weighing heavily on the rand, the AA predicts.

Combine this with continued oil strength and South Africans will almost certainly face steep fuel price hikes in the next few months.

Local motorists are still reeling from a recent spate of increases, with the price of petrol having increased by R1 a litre in the past three months alone, while diesel has seen an even steeper R1.13 climb since the beginning of September.

Currently SA motorists pay R13.56 for a litre of 95 Unleaded at the coast and R14.05 inland, with 93 Unleaded coming in at R13.78.

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