JOHANNESBURG – The Automobile Association of South Africa (AA) says a major fuel hike is expected as from the first of November 2017.
The AA says a litre of diesel is expected to go up between 23 to 27 cents a litre, with petrol going 4 cents more a litre.
According to the association, fuel price hikes are determined by both local and international factors on a monthly basis.
The association says fuel hikes are as a result of the devaluation of the South African rand against the United States dollar.
According to the AA, the medium budget policy statement which was delivered by the Finance Minister Malusi Gigaba last week is one of the main factors for poor rand performance.
“We believe fuel prices have not yet felt the full effect of the rand’s weakening in the wake of the medium-term budget policy statement. We expect that impact to start with next month’s fuel calculations, meaning South Africans should prepare for further price hikes before Christmas,” said Layton Beard, AA spokesperson.
Beard said the moment Gigaba delivered his speech, the rand eventually plummeted short against the US dollar as markets digested his budget policy statement.
Another factor which has weakened the rand is the fact South Africa imports crude oil and finished products not on its terms, but at a price set at international level, including shipping costs.