The weakening of the rand against a backdrop of rising oil prices is a bad omen for South African motorists… Economist Tony Twine predicts a 14c-a-litre hike in the price of petrol next month.

The weakening of the rand against a backdrop of rising oil prices is a bad omen for South African motorists… Economist Tony Twine predicts a 14c-a-litre hike in the price of petrol next month.


Although fuel prices decreased by 23c-a-litre earlier this month, consumers will no longer be protected against the effects of international crude oil prices because the rand weakened significantly after Thursday's cut in interest rates.


The Department of Minerals and Energy's daily update of national fuel import costs showed large under-recoveries for all fuel types last Thursday. For petrol it was about 23c/l, for diesel 28c/l- to 34c/l and for paraffin 30c/l.


According to , since the monthly pump price adjustments are based on the average over-or under-recovery during the previous month, “only renewed rand strength or a collapse of the crude prices market can prevent hefty price increases in two weeks' time”.


The likelihood of the latter appeared slim yesterday with reports from Iraq indicating that oil exports were running at half their normal rate as anti-US protest action prevented the re-opening of a main oil pipeline in that country.


For most of last week oil exports were running 50 per cent below the normal level of 1,8-million barrels a day after saboteurs attacked a pipeline that links southern oil fields to two offshore terminals.