February fuel price outlook on the back of oil surge, rand weakness

Unleaded 95 Octane petrol is expected to drop by eight cents a litre in February, but 93 Octane petrol, diesel and illuminating paraffin are all set for a price rise at month-end.

This is according to the Automobile Association (AA), which was commenting on unaudited mid-month fuel price data released by the Central Energy Fund.

“International oil prices surged by nearly two dollars a gallon in late December 2019 before beginning a recovery which was halted by the recent tensions between the USA and Iran,” said the AA in a statement.

“In the first week of January 2020, the two-dollar mark was tested again, albeit with a slight recovery since.”

The AA says that the Rand, which dropped as low as R13.95 to the US dollar at the end of December, had also begun to tick up, passing R14.40 at the close on Tuesday 14.

“This rise means bad news for fuel users and comes at a time when many consumers are already feeling the financial pinch,” noted the Association.

The AA says that political tensions in the Middle East, one of the world’s richest oil-producing regions, are likely to produce continued uncertainty which would feed into oil price movements.

“The Rand’s performance will be key in keeping any further oil hikes at bay,” it concluded.

(Compiled by Kaunda Selisho)

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