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Motorists could see ‘catastrophic’ fuel price hikes, AA warns

The association expects a litre of petrol to cost consumers as much as R20 by the end of 2021.

The Automobile Association (AA) on Tuesday warned that the country’s drivers could see a ridiculous surge in fuel prices from November, driven by the surge in oil prices, a weaker rand and a looming hike in the slate levy.

AA says that motorists can expect petrol to cost 99 cents more per litre and illuminating paraffin to rise by R1.42 a litre, which will ultimately leave consumers paying more than R19 a litre for petrol – 30% more than what it cost in January – and R17 a litre for diesel.

“The hikes in diesel and illuminating paraffin would be the largest in South African history, bearing in mind that this is only based on half a month’s data,” AA said in a statement.

“R20 a litre for petrol is now a realistic scenario before the end of 2021,” it added.

Oil price reaches its highest level

On Monday, oil prices climbed to multi-year highs, upheld by power generators moving away from expensive gas and coal to fuel oil and diesel. AA does not anticipate that this will ease in the short term, especially given that the northern hemisphere is approaching winter.

“Brent Crude has broken through the 85 US dollars-per-barrel mark and the basket of oil prices used to calculate South Africa’s oil price are following Brent higher. We note the concern this is generating in the US, where President [Joe] Biden was reported to have called on the OPEC+ cartel to increase oil output to stabilise prices. This has not generated a response from OPEC+, and our view is that a response is not likely, since the current price pressures are beneficial to the cartel’s members,” AA said.

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A weaker rand and governance

The association said that with the average rand/US dollar exchange rate sitting at around R14.55 – which remains far above its June levels of R13.50 – plus a looming increase in the slate levy, consumers should not expect relief any time soon.

“The under-recovery to date this month has been vast, and the government will, in our view, have no option but to increase the slate levy to recover this deficit, making for a bigger hike,” AA noted.

“South Africans are paying at the pumps for weak governance, as one of the key indicators of the price of fuel depends on the exchange rate.”

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R20 a litre, now that’s a milestone. Let me see, petrol now costs more per litre than milk and fruit juice (although the just-squeezed stuff will still run you a bit higher). What’s next, coffee?

I suspect the few people who own EVs in SA must be feeling pretty smug round about now.

Sounds as though you haven’t paid a utilities bill for years!!!!

According to Mini it costs around R70 to fully charge their electric model, so still way cheaper than filling a tank which will now set you back in excess of R1,000 for a 60 litre. The main issue is still the paucity of EV choices. As much as I like Minis I’m not inclined to pay around R500K for a two-seater.

Till you plug the EV in.

Prius. Cheap as cadre deployment.

The more greedy they get with the Oil price or shorting Oil supplies, the sooner it will be the end for Oil.

Bicycles are good, South Africans take too much pride in not riding bicycles.

I have a good road bicycle (Carbon fiber), 1200cc bike and I can work from home.

I wonder if the ANC cadres can still remember how they plundered the Saldanha fuel reserves….hu? can you remember?

Those were long gone back in the mid-’90’s.

R20 per litre may be the tip of the iceberg, don’t forget that oil was well over $100 per barrel in the past so it could easily go there again. People should brace themselves for R30 per litre!

If it was just the petrol price…but I always think about the devastating domino effect on ALL prices influenced by petrol/diesel.

“South Africans are paying at the pumps for weak governance, as one of the key indicators of the price of fuel depends on the exchange rate.”

Why does the AA resort to cheap political points? Especially, with an election soon.

There are higher fuel prices worldwide, due to the higher oil price. Not just SA.

Thankfully due to good governance, we have energy security. Unlike the UK that has a fuel crisis.

Energy security? You call 14 years of rolling blackouts energy security? South Africans survive DESPITE of everything the government does, not because of it.

“Thankfully due to good governance, we have energy security”

Short changed on intellect I see

The UK doesn’t have a “fuel crisis”, they have fuel, its just tanker drivers aka “fuel delivery” that’s the issue. Fuel delivery issues is something we know very well thanks to strikes, this is a shock to people in the UK because unlike SA where we have “good governance” and have gotten used to the regular stuff ups, such issues are rare and unusual over there.

“due to good governance…” So you recon the ANC does well? Then WHY support the EFF, if the ANC should be good enough for you?

This will be the last time i respond to your yak yak comments . Aren’t you completely embarrassed by the replies you get, or are you just tooo thick skinned?

@”Robert from Sydney”, the AA is not a political party.

AA stands for Automobile Association in this context.

Ah, yes! Just what I needed to further perk me up after the Presidents encouraging news about the wonderfully successful employment stimulus. The good news is raining down on us, blessing us with bovine manure up to the neck region.

time for another international investor’s conference ? And a 5 year plan to replace the previous 5 year plan of 18 months ago.

Hellos inflation my old friends

The 70s is back in trend

I’m sure I speak for 99% here, our gatvol capacity is used up. There’s just no more leeway for this Gangster State. They must now change or be broken into 1000 pieces

Unfortunately the uneducated masses have more tolerance for gatvol and free T-shirts.

It’s the ignorance factor. They still can’t eat the T-shirts though but they get to steal electricity without consequences.

Sad words .. but so true

Does nothing to inflation in SA.

Here conveniently low numbers are given through to SASTATS by the government.

They will keep rates low. The reserve bank wants it that way.

Your empty wallet does not tell the same story yet they believe the population swallows the BS???

Rates should have been increased the last meeting already.

South Africa’s petrol price is one of the cheapest in the world.

So stop complaining.

You are actually correct and this despite most of it being tax !!
Its R28L in UK and R27 in Spain :

Prices per litre in USD
Italy 1,56
France 1,47
Germany 1,43
UK 1,34
Spain 1,26
Japan 1,21
RSA 1,21
USA 0,55

Those countries all have first class train systems – here 95% of the population goes in a motor vehicle, so the comparison is pointless. Further, those populations earn in strong currencies and ours earn in ZAR

Zimbabwe is cheaper.

So is Botswana and that’s after importing it from SA.

Hopefully we can expect a R10 and R20 Coin to correctly reflect the current value of the South African Rand.

Back in the Day, the R1 Coin was created so that a single loaf of standard (SABS) 800g bread would cost just that amount.

Whilst they are at it, a R500 and R1,000 note would also be needed.

Expropriation Through Inflation, spin those money printing machines and suck the value right out of the economy.

Switch to electric vehicles. You won’t regret it.

If only we could but there isn’t exactly a great selection out there… BMW i3 is around R700K. Mini is R500K — R600K. Jaguar SUV over R1 million. So unfortunately the best option remains a fuel-efficient ICE and remote work.

End of comments.

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