R20 a litre for petrol ‘is now a reality’

Motorists will have to dig deep in their pockets as fuel prices are expected to increase which will push fuel inland (95 ULP) above R19/l (close to R19.30/l), and R17/l for diesel next month.

The Automobile Association (AA) described the hike as catastrophic.

“Current data is predicting fuel price hikes of catastrophic proportions in November. The current picture is showing petrol will go up by 99 cents a litre, and diesel and illuminating paraffin increase by a R1.42 a litre,” the AA in a statement said.

“Taking this potential increase into account, the price of a litre of 95 ULP will have increased from R14.86/l in January to R19.30/l in November – a 30% increase over 11 months.”

Agricultural economist Kulani Siweya said the increase could not have come at a worse time.

“The agricultural sector has entered into the summer crops planting season and a great amount of fuel, diesel, will be burnt,” he said.

Siweya added it was concerning because input costs increased incredibly.

“For the most part since late 2020, we have seen food prices remain elevated, underpinned by global or external factors like high fertiliser costs.

On the domestic front, production conditions are favourable, owing to the good weather outlook but fuel prices, unstable and unreliable electricity and the cost attached, pose a risk to the food inflation,” he said.

The AA added the increase in diesel and illuminating paraffin would be the largest in South African history.

ALSO READ: Shock increase at the pumps expected in November

“R20 a litre for petrol is now a realistic scenario before the end of 2021,” the statement said.

Taxi commuter Kabelo Mabitsela said the fuel hike was unfair because he would be paying more due to his fare eventually going up.

Economist Phelisa Nkomo said a fuel hike triggered a number of factors in the economy.

“This increase will delay economic recovery and it’s an additional burden to the economy and will increase cost of doing business. With increased unemployment due to Covid, declining industrial output and global decline, South Africa has lost almost two million jobs,” she said.

The last time the government tried to find solutions regarding high fuel hikes was in 2018. Deputy President David Mabuza said at the time government was exploring solutions to address the high costs of fuel.

During a portfolio committee meeting, the then energy minister Jeff Radebe said government was using several avenues to lower the cost of fuel such as negotiating with crude oil producing countries to obtain pricing regimes that are favourable.

from The Citizen https://ift.tt/3bex2HH
via co.za news

Naijamerit
Author: Naijamerit

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