You can thank your finance minister for paying more for petrol from next month. He has single-handedly tanked (no pun intended) the value of the rand with his pathetic budget speech.
BusinessTech reports fuel prices are expected to rise further in November due to the continued rise in the crude oil price and the weakening of the exchange rate, which has come under renewed pressure this week after finance minister, Malusi Gigaba, painted a bleak economic picture for the country over the next several years.
The rand traded at its worst level in more than a year on Wednesday after Gigaba’s mini-budget speech triggered downgrade warnings among analysts.
Citing the latest information from the Department of Energy on Friday, independent economist Fanie Brink said that the price of petrol 93 (ULP & LRP) in Gauteng is likely to rise by 5.6 cents per litre, while the price of diesel with a 0.005% sulphur content could increase by as much as 27.2 cents per litre on Wednesday, 1 November 2017.
He noted that the average daily Brent crude oil price has in October increased to its highest level in more than two years, to $59,37.
In spite of the higher crude oil price, the changes in average international prices of petroleum products could result in a possible decline of 16 cents per litre in the gasoline price next month, but a possible increase of 4.7 cents per litre in the diesel price, Brink said.
The economist noted that the daily average R/$ exchange rate has depreciated sharply since its strongest level of $/R12.75 in September to its weakest level $/R14.22 level, during trading on Wednesday, mainly due to recent political developments and the weak signals that Gigaba sent out in his October budget.
This weakening in the exchange rate is expected to result in increases of 21.6 cents per liter in the gasoline price and 22.5 cents per liter in the diesel price.
The final price changes will be announced by the Department of Energy.