Drop in fuel prices lower than expected by AA
The fuel price drop was slightly weakened in the wake of developments around the Minister of Finance, Pravin Gordhan, being the subject of further investigation by the Hawks.
This is according to the Automobile Association (AA) which expected a higher drop in fuel prices in mid-August.
“The stronger oil price might have been kept in check more effectively had the Rand not sagged so sharply against the dollar in the wake of the investigation,” the AA says.
Renewed oil price strength, and a turnaround in the Rand/US dollar exchange rate, have put the brakes on the substantial drops in fuel prices suggested by mid-August data.
“International petroleum prices have put in a surprising rally since the middle of the month.”
The association says it now expects petrol to fall by around 25c a litre, diesel by 54c, and illuminating paraffin also by 54c.
In mid-August, when the Rand was at stronger levels, the AA predicted that petrol would drop by up to 69c a litre, diesel by 94c a litre, and illuminating paraffin by around 92c a litre.
The association further notes that while the impact on fuel prices of the significant devaluation of the Rand against the US dollar would not be felt immediately, the effects of the weaker Rand on fuel prices would be noticeable towards the middle and end of September, if it does not strengthen before then.
