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Massive hike in diesel prices coming next week

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The latest data from the Central Energy Fund (CEF) reveals that diesel prices will rise sharply next week.

It will be the third month in a row for diesel prices to go up having been on the rise since September 2022. Petrol prices will also increase after a brief relief in October.

Diesel will jump by around R1.61 per litre while petrol will have a 48 cents hike.

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The latest data from the Central Energy Fund (CEF) points to a 48 cents per litre hike for petrol and a jump of around R1.61 per litre for diesel.

According to the CEF, the latest projections for fuel prices in November are as follows:

  • Diesel 0.05% will go up by R1.61 per litre;
  • Diesel 0.005% will go up by R1.64 per litre;
  • Petrol 93 & 95 will go up by 48 cents per litre;
  • Paraffin will go up by 78 cents per litre.

Fuel price changes will come into effect on Wednesday, 2 November, with an official announcement expected in the coming week.

Local fuel prices are driven by two main factors – the rand/US dollar exchange rate, and movements in global oil prices.

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The Bureau for Economic Research (BER) on Monday (24 October) noted that although it weakened modestly week-on-week, the US dollar remained firm, keeping global currencies – including the rand – under pressure.

“Statements from Philadelphia Federal Reserve President Patrick Harker suggested that the US central bank would keep raising interest rates for a while, coupled with lower weekly unemployment claims, bolstered the greenback,” it said.

Read also: Here are the winners of the first South African Freight Awards

On Monday, the rand was trading at R18.27 to the dollar, persisting at levels above the R18.00 mark.

The one-month ahead Brent crude futures contract, meanwhile, rose by 2% – despite the announcement of additional releases from the US Strategic Petroleum Reserve to help ease supply constraints, the BER noted.

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Both the dollar strength and higher oil prices spell bad news for local fuel costs over the next week.

The Automobile Association said that, while final prices are likely to change by the time of the official announcement ahead of changes next, it does not expect a reversal, and a hike is coming.

“While these figures may change, we don’t expect a reversal; prices are still likely to go up in November. For now, it’s just the quantum of those increases that are in question now,” it said.

The association said diesel is a particular worry. Because diesel is a major input cost in many sectors, an increase in the price of this fuel will ultimately hurt consumers as manufacturers pass the increases down the line.

This will inevitably exacerbate the cost of living crisis in the country, with food inflation sitting at 11.9% in September, setting households back significantly.

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