July petrol price spike set to be higher than initially thought

The Automobile Association (AA) has tabled its final fuel prediction for July with an ever heftier than expected increase being on the cards.

Commenting on the final unaudited data report released by the Central Energy Fund on Friday (26 June), the AA said it expects the price of petrol to rise by R1.73 a litre instead of R1.59, diesel by a substantial R1.74 a litre as opposed to R1.48 and illuminating paraffin by R2.14 and not the initially calculated R1.94.

“The rebound in international oil prices has been as remarkable as their fall earlier in the year. The basic fuel price for petrol and diesel in South Africa jumped from around R3 a litre on 1 May to nearly R6 a litre by 25 June,” the AA said, describing the uptake in the paraffin price as a “huge blow to citizens who use paraffin for cooking, lighting, and especially heating during winter”.

It also stated that despite the Rand improving by 34 cents over the US Dollar in June, the national currency was still weak and down by around R2.50 even before the effects of the Coronavirus and downgrading of the country’s sovereign debt.

“We cannot overstate the effect that the Rand’s collapse is currently having on fuel users: if the Rand had remained at its pre-Covid-19 levels, fuel users would likely be seeing a reduction in fuel prices in the order of 75 cents a litre next month,” the AA concluded.

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