Increase of fuel hits its highest mark

By Rhodé Marshall
29 February 2008

Motorists are bearing the unfortunate brunt of having to spend much more money on petrol than they ever have before.

This comes as the price of fuel is to increase by R1 a litre over the next two months. A mere four years ago motorists were paying R4 a litre which means the price of fuel is just about to double – soon costing as much as R10 a litre.

Chief Economist at the Efficient Group – Dawie Roodt says the two main reasons for the biggest fuel increase in South Africa is the international oil price.

“Currently the price for Brent oil is over 100 dollars, that is the highest ever, so the oil price has gone up quite sharply over the last few weeks,” says Roodt.

Roodt says the other reason for the increase in the price of fuel is the exchange rate of the rand which has weakened considerably.

“Although in the last two weeks there has been some improvement because the rands trade to the dollar. The combined effect of these two changes on the price of the rand in the international oil price lie behind the expected increase in the petrol price,” explains Roodt.