THE Automobile Association (AA) believe motorists can look forward to petrol and diesel price drops of between 60 and 64 cents a litre at the end of the month.
Commenting on mid-month data released by the Central Energy Fund, the association said rand resilience and a declining oil price are to thank for the welcome news.
‘The current picture suggests that road users could be looking at a petrol price decline of between 60 and 64 cents a litre at month end, with diesel showing a 60 cents reduction and illuminating paraffin 57 cents.
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‘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,’ said the AA.
‘The big move was from oil, which shrugged off OPEC’s (Organization of Petroleum Exporting Countries) production quotas to drop by around eight percent since the start of the month.’
But AA warned SA is most likely still cruising for a bruising.
‘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,’ AA said.
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