Cause Of SA’s Biggest Petrol Hike In History

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South Africans should brace themselves for what is being dubbed ‘the biggest petrol price hike in South Africa’s history”. This comes after the Central Energy Fund’s recent announcement that locals can expect to pay as much as R17/ per litre of fuel from the beginning of October. 

Why The Sudden Surge?

According to the Automobile Association of South Africa (AA), there are a variety of vital factors that have influenced the looming increase. “A spike in international oil prices and a huge swing in the Rand/US dollar exchange rate have combined to predict a knockout blow at the pumps at the end of September.”

Although interventions were implemented by the Department of Energy for September to ensure that the petrol price remains stable, this might have done more damage. The AA has said that petrol was supposed to increase by between 23- 25c in September but only increased by 5c. This is what lead to the drastic price increase 20 times more than last month. Why the 5c increase? The department explained that it was to cover workers wages... 

What Can You Expect?

The Central Energy Fund’s report, outlines the very unstable Rand and the effects that it is having on the economy, with special emphasis on the fuel price. South Africans will be paying an increase of R1.12 per litre for 93 and 95 unleaded fuel respectively, while diesel will increase by as much as R1.38 per litre next month.

The table below outlines what motorists are currently paying for petrol and what they will be expected to scramble for from October:

Fuel Variation

September Price

October Price

93 Unleaded Petrol

R15.87

R16.99

95 Unleaded Petrol

R16.08

R17.20

Diesel

R14.41

R15.79

How Will The Fuel Hike Affect You?

Although October’s petrol price increase may seem excessive, this is not the end for fuel increases. Economists have warned South Africans that if the Rand continues to weaken as rapidly as it currently is, we could be expected to pay as much as R20 per litre by the end of next year. That is one scary thought!

This would have a dire effect on the country and its failing economy. The October increase will especially affect the agricultural industry with the R1.38 per litre increase in diesel. This industry has been in the red for sometime now, as this big knock comes after the drought which swept the Western Cape. Agricultural Industry costs increasing + Western Cape Drought =  hungry South Africans & suffering exports...leading to less money in SA. To make sure you aren't losing money elsewhere check if you are paying too much for car insurance and get multiple prices from different providers in 5 minutes:car insurance quotes comparison in south africa

So What Is The Government Doing About It?

On Wednesday a meeting was held in Parliament to discuss the contentious petrol issue facing the country. DA shadow Minister of Energy, Gavin Davis blamed the ANC government for the current South African financial crisis. A spike in international oil prices and a huge swing in the Rand/US dollar exchange rate have combined to predict a knockout blow at the pumps at the end of September,” explained the Minister.

Davis argued that it is the government’s job to ensure that citizens don’t feel the full burden of the increase and that government must subsidize petrol for its people. Davis proposed that fuel levies be severed by 20%. This would mean that petrol prices would be reduced by R1.06 per litre. The only problem is that in order to make this a viable option, the government would be required to find R15.5 billion. This, with Zuma’s abandoned debt, almost seems impossible.

While the country finds itself, once again, in turmoil, motorists can either choose to pay the exorbitant fuel increases or seek other, less expensive modes of transport.

Read our tell all article about the Best & Worst Insurance Companies In South Africa Exposed: Best & Worst Insurance Companies In South Africa Exposed:read more moneypanda

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