Tiny June fuel price decrease to favour only petrol

The Automobile Association (AA) has predicated a mixed fuel price outlook for June with drivers of petrol vehicles set to reap a tiny reward.

Commenting on the first unaudited data report tabled by the Central Energy Fund on Monday, the AA said it expects the price of petrol to drop by a scant one cent per litre with diesel and illuminating paraffin going the other way with predicted upticks of 20 and 25 cents respectively.

“After several weeks of stability, international oil prices have started to climb again, with a slight peak in the first week of May before a modest pullback. Although there is still a re-balancing of global supply and demand taking place in oil markets, the current variations are starting to more closely resemble the picture we saw before the Covid-19 pandemic,” the association said.

“This suggests that normal market forces are increasingly gaining the upper hand over last year’s disruptive gluts which led to astonishing sub-zero prices for West Texas Intermediate (WTI) oil.”

It also added: “Although the daily exchange rate has been wildly variable, the average rate has seen the local currency gain around 20 cents against the US dollar since the start of May. This means a net gain of around 11 cents against the dollar.

“The oil-versus-Rand see-saw will likely continue through the rest of May, and the month-end picture may be somewhat different to what’s currently being seen.”