According to the Automobile Association (AA), the current picture suggests that road users could be looking at a petrol price decline of between 60 and 64c a litre at month-end, with diesel showing a 60c reduction and illuminating paraffin, 57c.
“The Rand remained mostly stable against the US dollar in the first half of June, with strength in the currency contributing three cents a litre to the drop,” the AA says.
They add that the fuel price will come under pressure if the three major ratings agencies downgrade Rand-denominated debt to junk status, in future reviews of South Africa’s sovereign credit ratings.
“That could trigger substantial capital outflow, almost certainly leading to Rand weakness, which will be heavily negative for the fuel price.
“Barring unexpected political or economic shocks in the lead-up to the next ratings reviews, we expect fuel price movements to mainly depend on international petroleum prices,” the AA concludes.
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