Oil’s ongoing recovery is set to hit consumers hard in July with yet another steep increase in the price of fuel predicted come the eighth of next month.
Commenting on unaudited data released by the Central Energy Fund on Monday (15 June), the Automobile Association (AA) says it expects the price of all grades of petrol to rise by R1.59 a litre, diesel by R1.48 and illuminating paraffin by R1.94.
“The basic fuel price used in South Africa has jumped by eight percent since 1 June, with higher peaks, as international oil prices claw back some of the massive declines of the past four months. With world demand expected to continue to increase, South Africans must likewise expect the fuel price to gradually edge back towards pre-COVID-19 levels,” the AA said.
It however stated that a return to previous high levels are not expected immediately given the Rand’s improvement of 60 cents compared to the US Dollar at the beginning of this month, as well as the national currency’s breaching of the R17 mark.
Nonetheless, the association remarked that, “some pragmatism is needed, of course: with fuel showing this kind of increase in just the first two weeks of June, the increase could be much heftier come month end. If this continues, it might not be long before the R4-a-litre saving motorists enjoyed between February and April is erased. So, despite our optimism over a slow rebound for oil, we advise caution, especially with the Rand currently trading around R3 higher to the dollar than before the COVID-19 crisis began”.
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