MOTORISTS can breath a sigh of relief as the price of petrol will drop next month. The Automobile Association (AA) said they expect that the cost per litre will drop by 26 cents, with a 20 cent drop for both diesel and illuminating paraffin.
The Association said they noted that the Rand advanced against the US dollar during most of May, with further support from retreating international petroleum prices.
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“Both of these factors have contributed to the reduction in the fuel price,” the AA said.
The AA said the Organisation of Petroleum Exporting Countries (OPEC’s) move to continue its production cut for the next nine months showed that there was concern in oil producing nations about a continued world oversupply of oil.
They added that this could mean a period of relative price stability.
The background political noise affecting the Rand continued to play a role on the price of fuel.
The Association said: “With political uncertainty set to continue, our medium-term outlook for the fuel price is that lower international petroleum prices will be key to maintaining local fuel price stability if the Rand weakens again.”
This follows the increase of 49 cents per litre earlier this month.
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