Fuel party on hold as rand, oil decline – AA

South Africa’s recent period of fuel price reductions is set for a reversal, as the weakening rand and stronger international petroleum prices combine at the pumps.

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).

“The rand’s slow, steady appreciation against the US dollar during July and August was dealt a considerable setback by the controversy surrounding the Hawks’ investigation of Finance Minister Pravin Gordhan,” the AA said

“At around the same time, international petroleum prices began to appreciate, and the combined effect will be particularly significant for users of petrol.”

While diesel and illuminating paraffin are currently showing increases of about 24 cents a litre, the current data on petrol shows the hike is likely to be about 51 cents.

“With the rand still on a weakening trend against the US dollar, the fuel price move at the end of September will depend largely on international petroleum prices,” the AA said.

“Any significant international event which leads to further oil price strength is almost certain to be bad news at the pumps for South Africans,” the Association concluded.