Fuel prices will jump to record highs in June on the back of stronger international oil prices, and a deficit carried over from April. This is according to the Automobile Association (AA), commenting on unaudited month-end fuel data released by the Central Energy Fund (CEF).
“The Rand traded in a fairly narrow band against the US dollar throughout May. However, international oil prices have come under strong pressure, accounting for two-thirds of the price rise which will come into effect next Wednesday, 6 June,” the AA says.
It says this month’s price hike also includes a large deficit carried over from April.
“The Department of Energy’s monthly close-out happened early due to the public holidays in April, after which the Rand lost almost 60 cents against the US dollar in a matter of a day. This meant a substantial fuel price rice was a near certainty from the start of May,” the AA explains.
Petrol is expected to rise by up to 85 cents a litre, diesel by 87 cents, and illuminating paraffin by 82 cents.
Fuel prices reached an all-time high in May 2018 as prices neared the R15 per litre mark.
Motorists will not be breathing a sigh of relief any time soon as another, even higher, increase is expected for June.
The recent increases are as a result of the weakening Rand and rising oil prices.
Earlier in May United States President, Donald Trump, withdrew from the Iran nuclear deal and will be re-instituting sanctions against the country.
Consequently, oil prices have seen drastic spikes bringing prices to some of their highest since 2014. These increases are expected to last right up until next year.
– Citizen reporter