Motorists in for hefty fuel increase on Wednesday

Motorists will have to dig deeper into their pockets as all grades of petrol are due to increase on Wednesday.

In a statement last week, the Department of Energy announced that a litre of petrol 93 ULP and LRP will rise by 50 cents a litre, while a litre of 95 ULP and LRP will increase by 48 cents.

Meanwhile, a litre of Diesel (0.05% Sulphur) and will increase by 39 cents, while Diesel (0.005% Sulphur) will increase by 37 cents.

The Wholesale price of Illuminating Paraffin will rise by 43 cents and the price of SMNRP of Illuminating Paraffin will increase by 58 cents.

The Maximum Retail Price of LPGas will see a 106.00c/kg increase.

The department said the Rand/US Dollar exchange rate contributed to the increase of the petrol price.

“The Rand strengthened very slightly against the US Dollar from R13.91 to R13.87, on average, during the period under review when compared to the previous one.”

In addition, the key factor that contributed to the increase in the prices of crude oil was the fact that OPEC members agreed to cut production by 1.2 million barrels per from 1 January 2017 during their meeting that was held in Vienna, Austria, on 30 November 2016.

“Furthermore, Russia and other Non-OPEC producers also agreed to cut production by 600 000 barrels per day,” said the department.

The Automobile Association (AA) expects to be a series of fuel price hikes this year. The AA said that unaudited month-end fuel price data released by the Central Energy Fund (CEF) showed substantial price increases for all types of fuel.

“It is too early to know at what price level oil supply will match demand in the wake of the OPEC decision to cut production,” the Association commented, adding that it expected 2017 to be a difficult year for motorists.