Fuel Price Hike in December May Put a Damper on Holiday Cheer
Motorists in South Africa are bracing for another increase in fuel prices starting Wednesday, 4 December, which poses a challenge for those embarking on long-distance journeys to holiday spots during the festive season.
The Department of Minerals and Energy (DMRE) announced via a statement that the prices for both 93-octane unleaded petrol (93 ULP) and 95-octane unleaded petrol (95 ULP) will rise by 17 cents per litre.
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The price of diesel with a 0.05% sulphur content will increase by 54.88 cents per litre, while diesel with a 0.005% sulphur content will see a rise of 55.88 cents per litre.
The DMRE attributes this fuel price hike to the international prices of petroleum products and the depreciation of the rand against the dollar, which moved from R17.53 to R17.93 during the assessment period.
These elements have been significant contributors to the rising basic fuel prices for both petrol and diesel.
Read: Brace for higher fuel prices in November
After Donald Trump’s reelection as US president on 6 November, the rand has faced further depreciation over the past month.
Since the US election, the local currency has predominantly been trading above the R18 threshold, a notable decrease from R17.49 before the election.
This increase in fuel prices for December marks the second month in a row that prices have risen. The hike in November was the first since May 2024.
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The elevated fuel prices pose a serious risk to South Africa’s inflation trajectory. In recent months, the country has achieved noticeable progress in managing inflation, with the consumer price index (CPI) significantly dropping to 2.8% in October from 3.8% in September.
Falling fuel prices have played a crucial role in this inflation slowdown, according to Casey Sprake, an investment analyst at Anchor Capital.
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She warns in a company note that the persistent volatility in global fuel markets is likely to introduce uncertainty into South Africa’s inflation outlook in the near future.
“The rand’s vulnerability to global risk aversion remains a continual challenge, especially amidst geopolitical tensions or changes in international monetary policy,” she observes.
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