Fuel prices are expected to rise further in November due to the continued rise in the crude oil price and the weakening of the exchange rate, 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, 1 November 2017 could possibly increase by 5,6 cents per liter and the price of diesel with a 0,005% sulphur content possibly increase by 27,2 cents per liter.
According to international sources, the average daily Brent crude oil price has increased this month to its highest level over the past 2 years of $59,37.
The members and non-members of the Organisation for Petroleum Exporting Countries have therefore been very successful with its 9 month agreement reached in July this year to bring about a better balance between the international supply and demand by reducing its oil production, with the prospects of a target price of $60 per barrel.
In spite of the higher crude oil price, the changes in average international prices of petroleum products could result in a possible decline of 16,0 cents per liter in the gasoline price next month, but a possible increase of 4,7 cents per liter in the diesel price.
The daily average R/$ exchange rate has depreciated sharply since its strongest level of R/$12,75 in September to its weakest level R/$14.22 level, during trading yesterday, mainly due to recent political developments and the weak signals that the Minister of Finance, Malusi Gigaba, has sent out in his October budget.
This weakening in the exchange rate is expected to result in increases of 21,6 cents per liter in the gasoline price and 22,5 cents per liter in the diesel price.
The final price changes will be announced by the Minister of Energy.
Department of Energy