Commenting on unaudited data released by the Central Energy Fund on Friday (14 June), the Automobile Association (AA) remarked that decreasing international oil prices despite a fluctuating Rand could result in a 91 cents a litre drop in price of petrol come July third, with diesel set to drop by 70 cents and illuminating paraffin by 62 cents based on current predictions.
“Crude laboured above $70 a barrel for large portions of April and May, as the tug-of-war continued between the OPEC countries, which favour on-going output restrictions, and the USA, where production is steaming ahead. There had been a remarkable drop in the price of oil since the end of May, with the commodity currently trading around $61 dollars a barrel” the AA said in its statements.
The association however stated that, “South Africans are not getting full value though, thanks to Rand jitters in the wake of the ANC top leadership trading jibes over the future of the Reserve Bank. After a period of sustained price stability, the Rand weakened substantially against the US dollar, taking some of the shine off oil’s retreat.
“If stability returns to the Rand and oil settles at its lower level, there might yet be more good news in the pipeline. A lot will rely on politicians exercising restraint in their public statements. We urge government to decide on its economic policy clearly and unambiguously in private, before articulating it in public where investors are watching”.
Towards the end of business on Friday, the national currency was trading at R14.80 to the US Dollar with Brent Crude Oil at $61.80 a barrel.