South Africa Faces Record Fuel Price Hikes in September

South African motorists are set to experience a major blow as significant fuel price hikes are expected to roll in coming September. According to unaudited data from Central Energy Fund (CEF) and comments from the Automobile Association (AA), petrol prices will hit their highest since July 2022, while diesel will witness a record increase.

As gleaned from CEF's data, the petrol price is projected to rise between R1.59/l for ULP93 and R1.65/l for ULP95. The diesel wholesale price is expected to dramatically surge by R2.85/l. Consequently, a litre of ULP95 inland will increase from R22.83 to R24.48/l, and the ULP93 price will rise from R22.43/l to R24.02/l.

Alongside, illuminating paraffin prices are also set to increase substantially by as much as R2.80/l, pushing the cost of this fuel to R17.43/l inland and R16.50/l at the coast. The series of hikes is ostensibly driven by soaring international oil prices and the weakened rand-dollar exchange rate, which are contributing between 80% and 88% to the expected hikes.

Moreover, Reuters reported that experts anticipate Saudi Arabia, the world's largest oil exporter, to prolong its voluntary output cut until October exacerbating oil supply constraints and maintaining high prices.

Consequences of these increases include negative impacts on all consumers due to the higher input costs at the till. The AA iterates the importance of maintaining vehicles in good condition to ensure optimal fuel usage against the backlash of these hikes while welcoming calls for government intervention in reducing fuel prices.