Fuel price goes on a see-saw
The Automobile Association's (AA) mid-month fuel price forecast indicates a slight decline of one cent - yes, one cent in the price of petrol - a 20-cents decline for diesel and a rise of 25 cents for paraffin.
“After several weeks of stability, international oil prices have started to climb again, with a slight peak in the first week of May before a modest pullback. Although there is still a rebalancing of global supply and demand taking place in oil markets, the current variations are starting to more closely resemble the picture we saw before the Covid-19 pandemic. This suggests that normal market forces are increasingly gaining the upper hand over last year’s disruptive gluts which led to astonishing sub-zero prices for West Texas Intermediate oil,” said the AA.
An increase of Covid-19 numbers, increased levels of lockdown and underperforming vaccination programmes can, however, throw a spanner in the works.
The association further noted that while the mid-month picture is indicating certain movements now, these are likely to change before the official adjusted price for June is announced by the Department of Mineral Resources and Energy later this month.
“The oil-versus-rand see-saw will likely continue through the rest of May, and the month-end picture may be somewhat different to what’s currently being seen,” the AA concluded.
