THE petrol price could rise by as much as 55 cents in May. That’s according to the Automobile Association (AA) who also said that diesel and paraffin could increase by about 39 cents and 41 cents per litre respectively.
The association said the possible hike would be as a result of rating agencies downgrade of South Africa earlier this month.
It said, “The loss of confidence by investors, and the sovereign rating downgrades by rating agencies Fitch and S&P have led to the Rand slipping heavily against the US dollar.”
The AA went on to say that the Rand’s weakness contributed three-quarters of the expected fuel price increases at the end of the month, with hikes in international petroleum prices accounting for the balance.
The association was commenting on unaudited mid-month fuel price date released by the Central Energy Fund. It compared the country’s current position with previous months, drawing the conclusion that if South Africa’s currency had remained on an upward trajectory against the US dollar, that it could have been strong enough to overcome the global petrol price hike.
However the AA noted,”It is a long time till month end, and there is no certainty that the impact of the downgrades has been fully priced into the economy. The picture for May could be substantially different.”
