Fuel prices continue to rise
Fuel prices will be up in July, although oil weakness and a stronger Rand have kept the increase below the levels predicted in mid-June.
“In mid-June, petrol was set for a rise of up to 30c a litre, and diesel as much as 63c, but the picture has improved slightly in the past fortnight,” the AA says.
“We now expect more moderate increases, with petrol up around 11c a litre, and diesel higher by approximately 43c.”
The AA says that despite a turbulent period on world markets in the wake of the United Kingdom’s referendum on leaving the European Union, the average Rand/US dollar exchange rate used to calculate the fuel price strengthened slightly in the Rand’s favour during June.
This, coupled with an oil price which dropped sharply in the wake of the UK referendum result, had had a favourable effect on South African fuel prices. However, the AA warns that ongoing volatility posed a risk of further price hikes.
“Both the basic fuel price and the daily exchange rate saw wild swings either way in June.
“We expect further volatility in the short to medium term as world markets continue to digest the consequences of the UK’s referendum to leave Europe, which means that any additional political or economic shocks are likely to have a strong impact on South African fuel users,” the AA concludes.
