An increase in the fuel price is set to occur at the end of May thanks to the weak rand and stronger international oil prices.
This is the view of the Automobile Association (AA), which was commenting on unaudited mid-month fuel price data released by the Central Energy Fund (CEF). “Motorists have been fortunate in 2016 so far, with lower oil prices buffering the country from the weaker rand,” the AA said.
“However, oil has now strengthened while the rand continues to decline, with both contributing to the current under-recovery picture.”
The mid-month data shows that petrol is set for an increase of around 39 cents a litre, with stronger oil accounting for around 23 cents of the rise, and the weaker rand contributing 16 cents.
Diesel is faring worse, with a 61 cent rise on the cards, while illuminating paraffin is showing an increase of 44 cents a litre.
“With oil prices rising steadily, South African fuel users have lost their cushion against the rand’s ongoing weakness,” the AA commented.
“Our concern over the rand’s short-term trajectory is growing; since the start of May, it has depreciated from around R14.20 to the US dollar to its current level of R15.80. If oil continues to firm, rand weakness is set to have a severe impact on fuel users,” the association concluded.
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