As the seasonal Black Friday slash-down sales of goods gain momentum this month, motorists, holidaymakers, taxis, logistics as well as delivery and courier service industries have to tighten their seat belts for another massive fuel hike ahead of the festive season.
The ANC government has urged under-siege consumers to start paying attention to the Russia-Ukraine war as the cost of fuel, oil and gas is likely to spiral out of control globally as the eastern-bloc conflict escalates into a full-blown first year in February 2023. Fuel industry experts are predicting a massive increase in petrol, diesel and paraffin prices in early December, closely following November’s record-high hike in cost per litre with diesel – the lifeblood and lifeline of the trucking and haulage industry – skyrocketing by R1.60 per litre.
Gwede Mantashe, Mineral Resources and Energy Minister, this week warned South Africans that the international crisis between Russia and Ukraine could trigger higher costs for motorists and transport industries. “We should pay attention to the developments between Western countries and the Russian Federation on the Ukraine matter, in so far as it impacts crude oil prices. This could result in huge increases in fuel prices globally and negatively affect local consumers and transport users,” said Mantashe. The persistent fuel increases are tied directly to the rand’s performance globally. Regarded as the other important component in local pricing, the rand kicked off the new month on the back-foot, but made some slight gains last week. In layman’s language, a weaker rand translates to a higher fuel cost and vice-versa.
Economists say the rand is fundamentally undervalued, but is expected to pull up in the next quarters with Absa economists saying that the rand will strengthen further at R16.75 to the US dollar before the end of the year. The central Reserve Bank predicts R17.38 to the USD. The Central Energy Fund shows the market fluctuations to be the key driver behind the bleak forecast of ever-escalating costs of international petroleum products while the weaker rand sparks local price hikes. The cost of crude oil has jumped to $100 (R1 675) per barrel and global prices that tend to swing wildly have promoted a general supply crunch on fuels like diesel amidst shortages in the US, Europe and of course South Africa – a country hugely dependent on imported oil for fuel supply which continues to bear the brunt of the topsy-turvy chart of the energy picture.
