Fuel prices are expected to rise further in October due to the sharp rise in crude oil price, says independent economist Fanie Brink.
According to the latest information from the Department of Energy announced this morning, the price of gasoline 93 (ULP & LRP) in Gauteng on Wednesday, 4 October 2017 could possibly be 26,3 cents per liter and the price of diesel with a 0,005% sulphur content may rise by 37,8 cents per liter.
According to international sources, the average daily Brent crude oil price has increased from $52,34 to $59,22 a barrel over the past month, the highest level since June 2015. This increase is supported by a threat of Turkey to cut the crude oil being transported by a pipeline from Iraq to the outside world. Turkey is opposed to the possible independence of the Kurdistan region in Iraq.
The members and non-members of the Organisation for Petroleum Exporting Countries also confirmed that the market is well on its way to a rebalancing by the joint reduction of their oil production, while the demand for oil remains strong.
Hurricane Harvey also caused the USA to close almost 25% of its refining capacity, while the rough sea caused by Hurricane Maria had also delayed the transport of crude oil along the North Atlantic coast.
The higher crude oil price has resulted in sharp increases in the average international prices of petroleum products, which could cause possible increases of 33,2 cents per liter in the gasoline price and 44,8 cents per liter in the diesel price.
The daily average R/$ exchange rate strengthened R/$12.75 during the first week of September and subsequently weakened again to R/$13,28, but it is expected that the price of gasoline will decrease by 6,9 cents per liter and the diesel price by 7,0 cents per liter.
- The final price changes will be announced by the Minister of Energy. Source: Department of Energy