Fuel price may rise at the end of the month
South Africa’s sagging Rand / US dollar exchange rate continues to take the shine off ongoing international oil price weakness.
This is based on unaudited mid-month data released by the Central Energy Fund (CEF).
“Had the exchange rate remained flat in 2015, South Africans would currently have been paying, on average, 45c a litre less at the pumps,” the Automobile Association (AA) says.
“This deficit has widened by another 32c to 40c in the first two weeks of January, turning what would have been a 24c per litre drop in petrol at the end of the month into a potential rise of up to 16c.”
An oil price benefit of around 90c a litre to the diesel price has instead been muted to around 58c a litre by the exchange rate, with illuminating paraffin showing a similar picture.
“The exchange rate’s ongoing weakness might mean trouble for the fuel price if oil prices begin to tick up again,” the AA adds.
“At the current Rand / US dollar exchange rate, a return to oil’s highs of 2013 and 2014 would result in the fuel price approaching R20 a litre, putting yet more pressure on South Africa’s already-strained economy,” the AA concludes.
