The Department of Energy has announced that on 5 October 2016 the retail price of 93 octanepetrol will increase by 44 c/litre,95 octanepetrol by 43c/litre and diesel by 23c/litre.

What's the biggest reason for the increases? Well, for once, it was not the weak rand/dollar exchange rate. Although the national currency declinedlast month, it recently made a decent recovery. "The Rand declined early in September against the US dollar, but has since strengthened. Only around eight cents of this month's increase will come from Rand weakness. It is oil strength which has been the major contributor," said the AA.

It's interesting to note that the Organisation of Petroleum Exporting Countries (OPEC) has reached a preliminaryagreement to limit oil production, the first time this has happened since 2008. If this deal goes through, outputs could be curtailed by up to 700 000 barrels a day which will stimulate international petrol prices. However, non-OPEC countries could up production and affect the price negatively. It's all a case of supply and demand.

The AA is more concerned about our currency."If the Rand remains volatile, South Africans will be more exposed to changes in the oil price, and we advise motorists to continue to economise in the absence of a clear picture of what effect the OPEC decision may have," the Association concluded.

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