Another fuel price hike in February

Motorists can look forward to what will be the second petrol price hike for 2017, as petrol is expected to rise by 29 cents on Wednesday. This after a 50 cents price increase earlier this month.

“The Department of Energy (DOE) informs the public of the fuel price adjustments for February 2017. South Africa’s fuel prices are adjusted on a monthly basis, informed by international and local factors. International factors include the fact that South Africa imports both crude oil and finished products at a price set at the international level, including shipping costs,” highlighted the DOE.

According to the DOE, the main reasons for the fuel price adjustments are due to the following:

-The contribution of the Rand/US Dollar exchange rate, as the Rand strengthened against the US Dollar from R13.87 to R13.60, on average, during the period under review when compared to the previous one.

-The increase in the price of crude oil. Crude oil increased, on average, during the period under review. Oil prices rose on news that key crude exporters, including Saudi Arabia and Russia, were cutting production to reduce excess supply of crude. Furthermore, the US inventory data showed that the global market was tightening due to lower production by OPEC and other exporters.

-The average increase in the international prices of all petroleum products. The prices of petrol, diesel and illuminating paraffin increased, on average, in the international markets during the period under review. The Basic Fuel Price (BFP) of all the products increased in line with the price of crude oil.

“Based on current local and international factors, the fuel prices for February 2017 will be adjusted as follows: Petrol (both 93 & 95 - ULP and LRP) at 29.00c/l increase, diesel (0.05% and 0.005% sulphur) at 21.00c/l increase, wholesale price of illuminating paraffin: 17.00c/l increase, SMNRP of illuminating paraffin: 22.00c/l increase, and maximum retail price of LP gas: 21.00c/kg increase,” stated the DOE. 

With two fuel price increases in such a short space of time, experts are warning of a tough year ahead for motorists.

“The further rise in the petrol cost has a negative impact on consumers who are already struggling to make ends meet. Adjusting budgets and making sacrifices is not the easiest of things to do. This leaves consumers with no option but to take out short term debt, which is usually expensive to pay off leaving them in a worse off financial position,” added Arthur Wasara, marketing assistant at DebtBusters. 

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