The Automobile Association (AA) has predicated yet another substantial increase in the price of all grades of fuel from next month. Commenting on unaudited data released by the Central Energy Fund on Wednesday (15 July), the AA said it expects the price of petrol to rise by 35 cents a litre, diesel by 68 cents a litre and illuminating paraffin by 63 cents a litre from 5 August.
“This will still leave our fuel prices below their pre-lockdown highs notwithstanding the Rand currently being pegged about two Rand weaker to the dollar than it was then. Despite our cautious optimism that stability is creeping back into the market, we still advise motorists to expect further fuel price rises in the short term,” the association said.
“Since 19 June, the local currency has traded in a daily band between R16.40 and its current level of around R16.80 to the dollar, which is a narrow range by comparison to what we have seen since March. It seems that there was some Rand over-reaction to much of the bad news – both globally and domestically – over the past three months. We’re hopeful the correction will continue towards more optimistic valuation levels”.
It also stated that while note is taken of the stronger international oil price over the last ten days of the month, “we believe this might represent a more stable price plateau as the world oil market continues to rebound from the dramatic price plunges of April”.