Fuel price likely to rise in November, says AA

The five-month trend of fuel decreases is set to end in November according to the Automobile Association (AA).

Commenting on unaudited data from the Central Energy Fund (CEF), the AA says it expects the first fuel price increase since May in November as a result of higher international product prices and a steady softening of the rand against the dollar.

According to the CEF’s figures, the price of ULP95 is expected to increase by about 14c/l, while ULP93 is expected to go up by about 3c/l Diesel is expected to increase by 13c/l-14c/l while illuminating paraffin will increase by about 7c/l.

“Lower stable fuel prices play a crucial role in reducing inflation and lowering prices of goods and services,” the AA said in a statement.

“It would greatly benefit our economy if the fuel price decrease trajectory continued for longer but the expected increase, though marginal at this stage, comes at a time when most consumers are still struggling financially and any increase now will add pressure on them”.

The AA says the CEF data indicates the expected price increases in this cycle are a result of a sharp rise in international product prices from the beginning of October, and the steady weakening of the rand against the dollar — the main metrics in determining local fuel pricing.

“Due to the tensions which are ramping up in the Middle East, the local currency could be under significant pressure going into the last two weeks of October and this could have a more significant impact on local fuel prices in November. At this stage it is important to keep an eye on that indicator as we head into the new month,” the AA said.

Officially adjusted fuel prices come into effect on November 6. The official announcement of the November fuel price adjustment by the department of mineral resources & energy and energy is expected by Monday, November 4.

The AA added this is a mid-month review of the CEF data and prices are likely to change before the end of the month.