According to the Automobile Association (AA), the mid-month data is forecasting petrol to increase by up to 55 cents a litre in May, diesel by around 39 cents a litre and illuminating paraffin by an estimated 41 cents a litre.
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“The loss of confidence by investors and the sovereign ratings downgrades by ratings agencies Fitch and S&P have led to the Rand slipping heavily against the US dollar, down from around R12.35 at the beginning of the month to its current position of around R13.40.”
The AA says the Rand’s weakness contributed three-quarters of the expected fuel price increases at the end of the month, with hikes in international petroleum prices accounting for the balance.
“However, it is a long time until month end and there is no certainty that the impact of the downgrades has been fully priced into the economy.
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“The picture for May could be substantially different,” the AA notes.
