Fuel prices are expected to show big increases in December due to the continued rise in the crude oil price and the further weakening of the exchange rate, says independent economist Fanie Brink.
According to the latest information from the Department of Energy announced this morning, the prices of gasoline 93 (ULP & LRP) in Gauteng on Wednesday, 6 December 2017 could possibly increase by 71,9 cents per liter and the price of diesel with a 0,005% sulphur content possibly increase by 61,1 cents per liter.
According to international sources, the average daily Brent crude oil price has increased this month to its highest level since June 2015 of $64,27 per barrel.
The members of the Organisation for Petroleum Export Countries and Russia meet again later this week to decide on an extension of their 9 month agreement reached in July this year to bring about a better balance of international supply and demand by reducing its oil production
Because of further increase in the crude oil price, it is expected that the average international price of gasoline may rise by 45,7 cents per liter and the diesel price by 34,3 cents per liter.
The daily average R/$ exchange rate has weakened over the past month from about R/$13,80 to R/$14,20 due to political uncertainty and further economic deterioration that caused a further downgrading in the country's credit status last week.
This weakening in the exchange rate is expected to result in an increases of 26,2 cents per liter in the gasoline price and 26,8 cents per liter in the diesel price.
The final price changes will be announced by the Minister of Energy. Source: Department of Energy