In a statement, the AA said the ongoing lower price of oil was protecting South African motorists from the rampant rand/US dollar exchange rate. AA was commenting on unaudited month-end data released by the Central Energy Fund (CEF).
AA spokesperson Layton Beard said, “The average exchange rate used in the fuel price calculation has breezed past R16.40 to the dollar, approximately 25 percent lower than at the same time last year. If the rate had held to its 1 January level, petrol would have dropped by up to 45c a litre. Despite the saving from the oil price, the petrol price is set to increase by three to six cents.”
Beard said a similar picture was seen for diesel and illuminating paraffin, where the oil price weakness would have seen a reduction of R1 a litre with a flat exchange rate. However, the currency’s continued decline has pared the decrease to a lower, albeit welcome, 64c a litre for these fuel types.
“As we have previously commented, the weak oil price means South African motorists have yet to be exposed to the full effect of the rand’s slump. If the oil price turns the corner without some recovery from the rand, substantial fuel price increases are likely.”
