More bad news as another fuel price increase hits
Fuel price increases are set to continue in the beginning of July and motorists can expect a fuel increase of between 43 and 46 cents a litre.
The Automobile Association (AA) says the weakening Rand is the biggest driver of the increases.
The association was commenting on the unaudited daily fuel price data released by the Central Energy Fund (CEF).
“The average Rand/US dollar exchange rate has weakened considerably since the end of May,” says the AA.
“The Rand has lost around 40 cents against the US dollar, and this has contributed almost half of the increase forecast for the petrol price.”
They add that the balance of the increase was due to fluctuations in the landed prices of petroleum products.
“Diesel prices have moderated, but there was a steep spike in the petrol price in the second week of June. The petrol price has since come off this high, but not enough to prevent a considerable price increase at the pumps,” says the AA.
“We expect the price of petrol to increase by between 43 and 46 cents a litre, while diesel and illuminating paraffin are less affected, with price increases of only around six cents on the cards.”
The AA says fluctuations in international petroleum prices were abnormal in a flatter trend, and that petroleum prices remained fairly stable.
A greater concern was the average exchange rate which had weakened from around R11 to over R12.30 to the US dollar since January.
“If this trend continues and is not offset by reductions in international petroleum prices, fuel prices will begin testing their previous record highs before the end of the year,” the association adds.
