SAs fuel price crisis continues Posted Mon, 04 Sep 2000

The latest increase in South African fuel prices follows a surge in international crude oil and petroleum product prices, which are close to their highest levels since the 1991 Gulf War. The situation has been exacerbated by a weakening of the rand against the US dollar.

The Department of Mineral and Energy Affairs announced on Friday that the price of diesel and petrol would increase by 15 cents and six cents a litre respectively from 6 September.

Meanwhile, there is uncertainty about the possibility of further price hikes. Although there are indications that the Organisation of Petroleum-Exporting Countries (Opec) might consider an increase in crude oil output, the effect of such a move will only be noticeable in a few months time.

But even a substantial cut in crude prices might not have a positive effect on South African fuel prices. The value of the rand keeps on dropping against a strong dollar and reached the R7-level last week. International oil prices are quoted and paid for in US dollars.

Domestic fuel prices have risen by around 70% since February 1999, fanning inflation in South Africa.

The ministry had earlier forecast an increase of 14 cents in the price of diesel, effective from 6 September. A litre of petrol in Gauteng retails at R3.60 a litre.

http://business.iafrica.com/news/sabusinessnews/59663.htm

-- Martin Thompson (mthom1927@aol.com), September 04, 2000