South African fuel prices could increase further on 6 December 2017. While it is relatively early to be certain about the scale of the increase, the current estimates suggest that prices of petrol and diesel might increase by 5% and 3%. This is mainly driven by higher Brent crude oil prices, as well as a relatively weaker domestic currency.
The increase will add pressure on farmers as it coincides with the planting period, particularly in the western regions for summer crops, where the optimal planting window for grains and oilseeds only closes in early January 2018. As stated previously, fuel makes up 11% of grain production costs, and a notable share is utilised during planting.
Petrol (95 ULP inland) and diesel (0.05% wholesale inland) prices could increase by 74 cents per litre (c/l) and 63 (c/l) respectively, on 6 December 2017. This could subsequently lift the retail price of petrol to R14.47 per litre from the current level of R14.05 per litre – the highest levels on record in a dataset starting from January 2010. At the same time, the wholesale diesel price could increase to R12.75 per litre from R12.35 per litre in November 2017 – the highest levels since August 2014.