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The Automobile Association of South Africa said fuel prices are expected to rise sharply, predicting a “whopping” increase of 80 cents a litre for petrol.
Commenting on unaudited mid-month fuel price data on Friday, the AA said diesel is “flagged for an increase of around 61 cents a litre, and illuminating paraffin for an increase of 63 cents."
The Association said that unless the picture drastically improves by month-end, South Africa's fragile economy is set for a major hit.
"The problem is international oil prices, which have been consistently climbing with each passing day," the Association says.
“A general increase in positive sentiment as COVID-19 vaccines are rolled out has combined with upticks in global economic activity, pushing up demand for oil and taking prices with it."
The AA notes that the average exchange rate of the Rand against the US dollar has not, however, been a major contributor to the increases throughout the first two weeks of January.
"With the Rand relatively strong by recent standards, the only hope for a reprieve relies on a pullback by oil. Unfortunately, the trend lines suggest that the situation may deteriorate further before month-end," the AA said.
