The demand for petroleum products has increased as lockdown regulations around the world have slowly been eased or have completely ended.
With an increase in demand comes an increase in price. The Automobile Association of South Africa says because global oil prices strode higher in July, fuel price increases are set for August despite a surprise upside from the Rand.
“As matters currently stand, petrol is likely to increase by between nine and 16 cents a litre, diesel by up to 48 cents, and illuminating paraffin by 43 cents,” a statement by the AA said.
In July, the price of Petrol Unleaded 93 increased inland by 12,35 % from June’s R13,20 per litre while Diesel 50ppm went up 14,82 % to R13,09.
The association added that oil traded at a fairly tight range throughout July. “It was a substantial climb at the beginning of the month, plus some recent volatility, that combined to push prices higher.”
The association explained that diesel and illuminating paraffin have been more affected by this than petrol.
The AA added that without the Rand’s good performance this month, the increases would have been higher.
“The Rand gained eight cents against the US dollar during July and the average exchange rate has firmed to below R16,90. With so much negative news surrounding the economy, the Rand’s firmer trend is welcome, but we would like to see the government support this trend in the area of economic policy certainty,” they said.
The AA also advised motorists to be pragmatic about the possibility of further increases because of the level of global economic turmoil that currently prevails.
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