Rising oil prices are causing a spike in the cost of filling up your car. Picture: SUPPLIED
Rising oil prices are causing a spike in the cost of filling up your car. Picture: SUPPLIED

Sharp fuel price hikes are expected in February, including an 80c/l increase in petrol and 61c for diesel, says the Automobile Association (AA). Illuminating paraffin is set for a 63c/l increase.

Commenting on unaudited mid-month fuel price data released by the Central Energy Fund, the AA says that unless the picture drastically improves by month-end, SA’s fragile economy is set for a major hit.

“The problem is international oil prices, which have been consistently climbing with each passing day,” the association says. “A general increase in positive sentiment as Covid-19 vaccines are rolled out has combined with upticks in global economic activity, pushing up demand for oil — and taking prices with it.”

The AA notes that the average exchange rate of the rand against the US dollar has not, however, been a major contributor to the increases throughout the first two weeks of January.

“Despite some wild swings in the daily exchange rate, and the average rate creeping up from about R14.60 to just over R15.00, only four cents of the substantial predicted increases come from rand weakness,” it says.

The association says an increase of this magnitude would make life harder still for transport companies and the many people whose livelihoods have been crushed by the economic carnage of Covid-19.

“With the rand relatively strong by recent standards, the only hope for a reprieve relies on a pullback by oil. Unfortunately, the trend lines suggest that the situation may deteriorate further before month end,” the AA says.

The price of 93 octane petrol sold inland rose 43c a litre and that of 95 petrol by 40c in January, while diesel prices increased between 54c and 55c depending on the sulphur content.

A litre of 93 petrol inland currently retails for R14.69 and 95 petrol for R14.86.

A year ago, the retail price of 93 petrol was R15.84 and 95 was R16.16.

The wholesale price of 500ppm diesel is R13 a litre and 50ppm is R13.03, compared with R14.62 (500ppm) and R14.67 (50ppm) in January 2020.

Fuel prices are adjusted on the first Wednesday of every month.

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