Saudi attacks herald generally higher SA pump prices – AA

There may be good news for South Africans who fill their cars up with 93 octane from October 2019, if the Automobile Association’s (AA’s) latest forecast pans out. It predicted on Friday 27 September that the pump price of 93 octane petrol should decline by four cents a litre when prices change on 2 October.

Sadly, the news is mostly bad.

“South African fuel prices are set to climb in October in the wake of the mid-September drone attacks on the Abqaiq oil refinery in Saudi Arabia ... oil prices ticked up in the first two weeks of September, (and) the impact of the attacks caused a further sharp price spike," the AA said in a statement.

"The current picture predicts an increase of around 19 cents a litre for 95 octane petrol, with diesel set to rise by 25 cents and illuminating paraffin by 24 cents," it said. Paraffin is mostly used in lower-income households so the poor will bear the brunt of this increase.

Rand gains helped offset some of the impact of increased oil prices.

“Without the rand’s performance, we could have been looking at price rises in excess of 40 cents a litre for some fuels,” the AA said. This is only a forecast, but the AA’s predictions are usually near the mark.

The hikes will put further pressure on hard-pressed South African consumers and businesses, but inflation should remain muted, not least because of the morbid state of the economy. Consumer inflation is running at 4.3%, while producer price inflation slowed to 4.5% in August from 4.9% in July.

Still, in early September 2019 there had been hopes for an October cut in fuel prices. Those hopes have now been dashed. BM