AA warns fuel price increase is likely

“The fuel prices were already trending higher before the widespread looting and unrest of the past few days. Now, the daily rand/US dollar exchange rate has spiked from R14,35 to nearly R14,80 since June 12. South Africa imports a lot of fuel, which will inevitably cost more in rand terms. Meanwhile, international oil prices remain on the advance, adding further pressure,” said the AA. The mid-month data indicates that petrol is set for an increase of 87 cents a litre, diesel 58 cents and illuminating paraffin 56 cents, and the AA said it expects little respite before month-end. The association noted that while the supply of fuel will not push the prices of fuels higher, the weakening rand, as a result of the riots, will play a major role as the exchange rate is a key indicator for the local fuel price.” The South African Petroleum Refiners has already declared a force majeure as a result of the unrest. The AA warned that if an operational refinery were to be overrun by criminals, surrounding areas would be at great risk. Source: AA