There is no indication that the petrol price will be stabilized anytime soon.
South Africans were spared the brunt of a nasty increase in petrol prices in September, thanks to government intervention, but October is expected to be a horror show.
Motorists breathed a sigh of relief earlier this month when it was announced that instead of petrol prices rising by an expected 25 cents per litre, government efforts kept the bump below 5 cents.
Government intervention can only go so far
Energy Minister Jeff Radebe was gracious enough to afford South Africans a much-needed reprieve, following a string of consecutive fuel hikes stretching since April. Still, motorists are paying more for petrol than ever before.
Radebe bemoaned international influences for the planned increase but maintained that this was a ‘once off’ effort implemented by the government to allow South Africans some breathing room, saying:
“Despite the fact that these increases were caused mainly by international factors‚ the department has decided to intervene temporarily this month. This is a once-off temporary intervention to provide some relief to motorists and consumers against fuel price hikes.”
But this government intervention has resulted in some dire consequences that are expected to hit motorists next month. In fact, it would seem that staving off an increase in petrol prices in September has doubled the damage in October.
Petrol prices: October expectations
The Central Energy Fund (CEF) has warned of an astronomical increase in petrol prices come October. It’s the kind of fuel hike that nightmares are made of. According to the report, which has been republished by various news outlets, motorists could be forced to cough R1 more per litre next month.
This would push the price per litre, for 95 petrol, well beyond R17. However, it must be noted that this is only likely to occur should international crude oil prices continue to rise and the local currency continues to fall.
Unfortunately for South Africans, the country has just entered a technical recession, the first of its kind since 2009, which has put further strain on an already trembling rand. The silver lining is that the rand seems to have now stabilised around R15 to the US dollar.
If the rand continues to firm, along with the price of crude, South African’s could be spared a monstrous increase in petrol prices. However, if the rand dips and the price of crude soars, motorists are in for a rough ride come October.