South Africans warned of record fuel prices

South African motorists could face record petrol prices from October as the ongoing war in the Middle East has pushed global oil prices close to $100 per barrel for the first time since July.

The latest data from the Central Energy Fund points to increases of about R2 ($0.12) per liter for petrol. This would push the price of 95 ULP up to R28.05 at the coast and R28.92 in Gauteng, beating June’s all-time highs of R27.19 and R28.05, respectively.

Diesel is also set for a significant increase, with the data pointing to hikes of between R1.50 for 500ppm and R1.80 for 50ppm. This will push the price of 50ppm up to R30.29 at the coast and R31.85 inland, close to its all-time highs of R30.62 and R31.38, seen earlier this year.

This warning does come with a disclaimer, as the predictions are based on early-month data, which is a moving target, as much can still transpire in the markets between now and the end of this month.

However, with no signs of the Middle East war de-escalating any time soon, leaving uncertainty around the critical Strait of Hormuz oil passage, the risk is currently skewed towards higher oil prices for the foreseeable future.

October’s predicted increases come in the wake of steep price hikes in September, when petrol rose by R1.34 per litre and diesel by between R2.94 and R3.15.

Higher fuel prices can push up inflation and squeeze household spending. Transport, food and other goods become more expensive as fuel costs feed through supply chains, while motorists have less disposable income to spend elsewhere. That can weigh on economic growth. The Reserve Bank has warned that higher fuel prices can raise inflation while weakening consumption and growth.

First published by IOL