FUEL price decreases of recent months appear to have been short-lived – for petrol users at least – as the price at the pumps looks set to increase.
This is according to the Automobile Association (AA), commenting on unaudited mid-month fuel price data released by the Central Energy Fund.
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As much as petrol could be set to increase, diesel looks poised to decrease, with an even bigger decrease for illuminating paraffin.
The AA predicts an increase of up to 50c/litre for petrol, a decrease of up to 56c/litre for diesel and a decrease of up to 76c/litre for paraffin.
‘In a dramatic reversal of last month’s oil swings, international product prices used to calculate South Africa’s basic fuel price have nearly doubled since their lows at the end of April,’ said the AA.
‘Over the same period, the rand has settled in around the level of R18.40 to the US dollar, almost R3 weaker than just three months ago, prior to the advent of the Covid-19 panic and multiple downgrades of our economy by ratings agencies.’
Fuel prices are currently R4/litre cheaper than at the beginning of the year.
‘Our concern, of course, is that the financial situation of many South Africans has changed for the worse in the last two months, with massive job losses and talks of across-the-board salary cuts.
‘This could make South Africans sensitive to even small fuel price increases.’
The association said the differences between the movements for different fuel prices are likely related to imbalances in global refining capacity in the first week of May as the oil industry came to grips with the unprecedented April oversupply and price crashes.
Fuel price volatility is expected to be substantial and long-lasting.
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