Another month, another petrol price hike. That’s what the experts are predicting for South Africa in February, after the two key indicators which dictate our fuel costs both took turns for the worse.
- It’s feared that another rise in costs will push the average petrol price over the R20-per-litre mark again.
Painful petrol price hike likely for February
Although it’s not yet been confirmed by the state, the Bureau for Economic Research (BER) has hinted that the petrol price for Mzansi will be going up in the next few days, due to a shift in the rand exchange rate, and the current value of crude oil. Financial analysts Price Waterhouse Cooper also predicted a hike last week.
South Africa imports a large majority of its fuel, meaning that we’re often at the mercy of global markets when the price at the pumps is set. ZAR, which had been standing firm against the US Dollar until very recently, just suffered a ‘terrible week’, losing a significant amount of value against the greenback.
“The stronger dollar weighed on selected precious metal prices, with the platinum price particularly hard hit, and the Rand exchange rate: The Rand had a terrible week, losing around 3.5% against the dollar.”
Why are we in this mess?
That in itself would be enough to spook motorists for the month ahead, however, our misery looks set to be compounded by an increase in costs for a barrel of oil – which is now 16% more expensive than it was last year.
Tensions between Russia and Ukraine – in an oil-rich part of the world – has also sent the price of crude oil rocketing. Adding these two factors together, therefore, is likely to result in an awful outcome for SA.
“The geopolitical standoff between Russia and Ukraine has been a key driver of higher global oil prices in recent weeks. The 1-month Brent crude oil futures ended last week above $90/bbl, bringing its year-to-date gains to almost 16%.”