South Africans should brace themselves. According to the mid-month unaudited data from the Central Energy Fund (CEF) the biggest fuel price hike in South Africa's history is coming.
A spike in international oil prices and a huge swing in the Rand/US dollar exchange rate have combined to predict a knockout blow at the pumps at the end of September.
Based on the current data, petrol users will be paying R1.12 more per litre, with illuminating paraffin costing R1.17 more. However, diesel users will be hit hardest, with a possible price hike of R1.38 per litre, pushing diesel to within a whisker of R16 per litre.
To put this in perspective, should this increase materialise, it will push the price of 93 unleaded octane fuel inland close to R17 a litre, off a January price of R14.20 – a total increase of around 20 percent, year-to-date.
It is also worth noting that a massive hike in the diesel price will be especially catastrophic for the agricultural sector which is already reeling from the prolonged drought. Extreme fuel price hikes could push marginal businesses, including farms, to financial breaking point, and have a massive negative impact of consumer pricing.
While we earnestly hope the picture improves before month end, we once again call on the government to urgently address the policy and structural issues which have put fuel users in the front line of the Rand's weakness.
Join the discussion on Facebook and Twitter by using the hashtag: #LetsTalkFuelPrice and let us know how these increases could affect you.