Higher oil prices set scene for steep fuel price hike: AA
Motorists must prepare for a sharp increase in the price of fuel, after four months of massive declines, says the Automobile Association.
The Automobile Association, in it commentary on the unaudited mid-month fuel price data released by the Central Energy Fund, says with the price of oil continuing its march back towards its previous levels in the first half of June, motorists can expect a further hefty fuel price hike going into July.
“Based on current figures, petrol is set to climb by up to R1,59 a litre, diesel by R1,48, and illuminating paraffin by a massive R1,94,” said the association in a statement earlier today.
They add that the basic fuel price used in the country has jumped by eight percent since 1 June, as international oil prices claw back some of the massive declines of the past four months. “With world demand expected to continue to increase, South Africans can expect the fuel price to gradually edge back towards pre-Covid-19 levels. However, it will probably take some months for oil to return to its previous trendline, giving motorists something of a breather.”
The association points out that with fuel showing this kind of increase in just the first two weeks of June, the increase could be much heftier come month end.
“If this continues, it might not be long before the R4-a-litre saving motorists enjoyed between February and April is erased. So, despite our optimism over a slow rebound for oil, we advise caution, especially with the Rand currently trading around R3 higher to the dollar than before the Covid-19 crisis began,” the AA concluded.
