| January 04 2008 at 12:06PM |
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By Sharlene Packree
Motorists should brace themselves for more petrol price hikes in 2008 as fuel prices are expected to climb to an all-time high.
This is according to the Fuel Retailer Association (FRA) which predicts that motorists should prepare to fork out as much as R8 a litre as the crude oil price increases.
Earlier this week, oil prices reached an all-time high, with a barrel of oil costing $100 (R680) after a 57-percent price increase in 2007.
This is set to have a major impact on the petrol price, causing huge concern to cash-strapped motorists. The price increases will also push up food and meat prices.
Currently, motorists are paying R7,23 a litre in KwaZulu-Natal.
FRA's chairperson Peter Morgan said: "This year we will see the highest fuel prices in our history. This is not good news for motorists. However, we have to be realistic."
Morgan warned that petrol service stations could expect a difficult year as petrol prices soared.
He said the fuel price was affected by many factors, chief among which were the price of crude oil and the rand/dollar exchange rate.
"We buy fuel from crude oil in dollars, and this is huge issue for us. However, there is a strong belief that crude oil may soon be priced in both dollars and euros, and perhaps even a third currency," he said.
This would allow South African suppliers to buy crude oil at the most favourable currency rate.
Morgan also said that political uncertainty in South Africa would have a negative effect on the rand, which would then increase the price of fuel still further.
"2008 will get off to a slow start, but we will see several petrol increases. Motorists can expect to pay as much as R8 a litre for petrol," he said.
Economist Christo Luus said he was confident that the price of crude oil would not pass the $100 mark, as it was not sustainable. "We will see spikes in the prices, but nothing dramatic. These spikes are a result of the political instability within the country," he said.
This article was originally published on page 1 of Daily News on January 04, 2008