Photo by: Bloomberg
Fuel users need to prepare for steep hikes across the boards with petrol prices expected to climb by 66 cents per litre, while diesel and illuminated paraffin will be up 57c/l and 49c/l respectively, according to the Automobile Association (AA).
The AA on Friday issued a statement outlining its fuel price estimates for March, based on the unaudited month-end fuel price data released by the Central Energy Fund.
"South African fuel users are set to be hit with yet more steep price hikes going into March," the statement read.
The association noted that the rand had performed well against the dollar, but it was not enough to offset the climb in oil prices.
"The international oil price seems unstoppable. We are in an eight-week streak of price climbs with no sign yet of a ceiling," the statement read.
According to the AA, increased economic activity due to the global rollout of Covid-19 vaccines contributed to firming demand for oil, and subsequently higher prices. Saudi Arabia's surprise cut in daily production targets also contributes to higher oil prices.
US oil production also tailed off during the first wave of the Covid-19 pandemic, amid the glut in oil supply. However, its inventories have now dropped to a normal range. Production needs to catch up with the falling inventory, otherwise the oil price will come under further pressure, the AA noted.
"Until oil supply and demand settle into stability, more hikes are likely. And, we cannot forget that April will already start with a significant addition of 26 cents a litre to fuel prices because of increases to the General Fuel and Road Accident Fund levies – inflicting further blows to already battered South African consumers," the AA said.
Domestically, petrol prices spiked by 81 c/l in February, while that of diesel climbed by 59c/l, Fin24 previously reported.