South African motorists should brace for a significant fuel price hike in March
SOUTH African motorists will likely be hit with yet another significant fuel price hike in March 2021 as international oil prices continue to climb.
If current trends persist until the end of February, the petrol price is likely to rise by around 50 to 55 cents a litre, while diesel could go up by approximately 45 cents. This is the scenario portrayed by mid-month fuel price data from the Central Energy Fund. However it’s worth noting that the picture could change for better or worse by the end of the month.
A petrol price increase of 50 cents would push the cost of a litre of 95 Unleaded up to R15.47 at the coast and R16.17 inland, where the cheaper 93 Unleaded would hit the R16 mark.
This is very close to the most recent highs seen in January 2020, before the oil price collapsed due to the pandemic, and when a litre of 95 ULP sold for R15.52 at the coast.
Higher oil prices to blame
Although the rand is at its best levels in about a year, trading at R14.44 at the time of writing, international oil prices have risen at a faster pace, pushing past the $60 a barrel mark in February. Consider that oil cost $56 in late January, which was already almost triple what it traded for at the height of the Covid-19 crisis in early 2020.
In January, the Automobile Association stated there was upward pressure on oil prices due to a general increase in positive sentiment due to the roll-out of Covid-19 vaccines and an uptick in global economic activity, with both factors pushing up demand for oil.
“With the rand relatively strong by recent standards, the only hope for a reprieve relies on a pullback by oil,” the AA said.
“Unfortunately, the trend lines suggest that the situation may deteriorate further”.