Petrol to go up while diesel goes down

The Automobile Association (AA) has released its projections for August, predicting that the petrol price will go up while the diesel price will go down.

“The current data shows a seven cents-a-litre increase for petrol, with a 20 cent decrease for diesel, with illuminating paraffin down by 14 cents,” an AA press release says.

According to the release, this is due to increases in the international oil price.

“The rand has progressively appreciated against the US dollar since 1 July, dipping below the R14 to the dollar mark,” it says. However: “While the rand has won ground against the US dollar in July, international oil prices have increased, offsetting the rand’s gains.

“This is according to the unaudited monthly fuel price data released by the Central Energy Fund (CEF).”

The increase in oil prices is due to “international inventories and ongoing political instability in the Middle East”.

The “unusual situation” whereby diesel users will see a reduction while petrol is likely to increase is due to the fact that the “increase in the refined cost of fuel was higher for petrol than for diesel”.

“There has been considerable volatility in both the exchange rate and the rand over the past month. The mid-month fuel picture is usually a good indicator of what is likely to happen at month end, but the current political and economic drivers of both the exchange rate and oil price are highly fluid.

“We regard the current figures as merely indicative at this stage, and pragmatism suggests the picture at month end might be substantially different from [the] current outlook,” the press release concludes.

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