Bumpy ride ahead for motorists

Diesel is trading above the R10 level for the first time

Economists have warned that a bumpy ride lies ahead for motorists. This comes as Brent crude oil is hovering above the $120 a barrel level and a warning by US investment bank that oil could top $200 within months.

The warning comes as higher crude oil prices already pushed fuel prices in South Africa to new records. Diesel is trading above the R10 level for the first time, while petrol is just short of the key level.

Economists point output that despite the resurgent rand, which soften the impact of higher oil prices, there are already under-recoveries, which means what consumers are paying less on fuel prices. The under-recovery at this stage is almost 15c/l on petrol, 27c/l on diesel and 30c on paraffin.