The latest news from oil speculators and traders is an unwelcome warning that the oil price could increase upwards to between USD75-USD100 per barrel by March 2018.
With the Rand trading negatively against the US Dollar (R14/USD) this could have dire consequences on the cost of fuel in South Africa in the coming months. Should the price of oil continue to rise (currently USD62 per barrel up from USD31 in January 2016).
Since 2009, the fuel tax and accident fund levies have increased by R2.64 per litre and it is expected that this could increase further in April 2018 given the current fiscal pressures. The wholesale price of Diesel (0.05% Sulphur) is currently R12.36 per litre and considering the forecast it is likely to increase to between R14.50-R15.00 per litre by April 2018. This means the pump price could reach as high as R16.00 per litre which would be a negative factor for transport costs during the 2018 season. And when transport costs increase, so do food prices.